Who doesn’t love spring? The flowers are budding, the days getting brighter, and the weather is getting warmer (we hope!!). It’s the perfect time to spring clean your house, but spring cleaning doesn’t just apply to houses anymore. Your finances are the centre of your business. They can help you forecast your financial future and make better decisions, so Spring is a perfect time to declutter your books.
Use online accounting software
Using good, cloud-based software will save you time and money. Online accounting software can allow you to create invoices, track payments, report VAT and manage stock levels. There are many benefits of online accounting software as it allows you to keep track of all your financial information in one place. We highly recommend Xero, which we use for all our clients.
Keep your books at the top of your priorities
As a small business owner, you have a million and one things to do. It can be tempting to push your books aside to focus on running your business. But if you want to keep your business on track for success and keep your financial ducks in a row, we suggest you prioritise your books. Setting aside some time either weekly or monthly will help you keep your books up-to-date and organised. Make time to review and update your books so you can avoid accounting tasks piling up and the less of a chore it will be.
Check your classifications
What happens when you don’t classify your spend correctly? If you haven’t been consistent when choosing your spend categories, then your financial reports won’t make sense. It will also be impossible to track if you’re missing anything. You wouldn’t believe some of the items we see posted in the wrong category!
We recommend you review your books in detail and check each classification. Make a note of the regular costs and suppliers and which account code they should be posted to. This is easy with cloud accounting systems such as Xero which allow you to set up rules and default categories by supplier.
Streamline your processes
Whether you do your small business accounts on a spreadsheet, or a cloud accounting platform like Xero, there are lots of tools available for automating and streamlining your processes. From electronically capturing purchases, tracking expenses to managing your cashflow, there are options for all small businesses to benefit from a more manageable bookkeeping routine.
Petty cash receipts are important
Don’t be nonchalant about keeping accurate records of your petty cash fund. Each time you dip into petty cash, you must make some sort of record in order to keep track of the amount being spent. You should reconcile your petty cash account regularly, that way you can spot any inconsistencies and know where your money has been going.
There is nothing worse than getting a fine from HM Revenue & Customs. We would suggest you bear in mind potential future expenditure such as VAT and other tax payments. We advise business owners to try and set aside funds in a separate bank account, so that when it comes to paying those bills there is money available and no need to panic.
The best way to spring clean your accounts is to hire professionals that you trust to do it for you. By outsourcing your bookkeeping, you will free up your time to focus on running your business. We have a dedicated, skilled team of bookkeepers who can support your business with bookkeeping, financial reporting and forecasting or perform a financial health check to pinpoint any potential issues. If you’re thinking of adding a new lease of life to your books, we would love to help.