When it comes to business organisation is key! Having a systemic & easy to follow approach to your bookkeeping not only helps your accountant but also makes it easier for you to find records, chase invoices and reduce the stress running your own business can bring!
Don’t just throw your receipts in a Tesco carrier bag!
The simplest way to improve your bookkeeping is to keep a log of your income & expenses. A diary, spreadsheet, even a summary of your income/expenses can help you understand your financial position throughout the year. You can then keep track of your income and expenditure.
Having a basic knowledge of spreadsheets is an easy and cheap way of maintaining your bookkeeping. The best method is to create separate sheets for income, expenses and mileage. If you find this a bit tricky, just enquire and we can set up spreadsheets for you!
Income - Things to include:
· Any income you have received in your normal day to day trading activities
· Income from any rental properties- make sure you include the address & give a breakdown of income for each property
· Any interest, shares, dividends & the sale of any assets need to be included also
· Any employment and P11D details
Expenses - Things to Include:
· Any expenses incurred in your normal day to day trading activities- group different suppliers together and annotate what the expenses are for e.g. B&Q (Materials), Aviva (Insurance), Shell (Fuel) etc. Once you have a column for each supplier with a description you can then add each receipt to the column- giving a total at the year/month end.
· For rental properties we need expenses incurred solely on that property- these include mortgage payments (we also need to know if the mortgage is interest only or capital repayments) any repairs, letting/management fees, ground rent, repairs etc.
Expense - Things NOT to Include:
· When inputting data into your expenses spread sheet be mindful of including expenses that do not fall within the tax year (06/04/201X)-(05/04/201Y). If any expense is not in the relevant tax year then remove the receipt & keep separately for you accountant to look at.
· Do not include personal items that are not for use in your business.
When it comes to software that assists your bookkeeping there are thousands claiming to be the best on the market. Working in the accountancy industry for many years, Your Tax Shop has tried & tested many bookkeeping programs. We recommend FreeAgent as it offers everything you need from a bookkeeping package and more (at a discounted price if you sign up with Your Tax Shop)! FreeAgent can be used on both your computer & mobile devices so is ideal for every client.