As a small business owner having a good system in place for organising your business finances will not only save you time it will save your sanity when it comes to submitting your tax return.
A couple of weeks ago I decided I needed to make some changes to how I organise my business finances. I was using an online accounting software to issue invoices, printing out receipts and inputting them into an excel sheet, whilst using another software to track my time. I was using too many different systems.
Practicing what I preach, I knew I needed a system whereby everything was streamlined and easier to use.
As a Virtual Assistant I am naturally well organised but as a new business owner managing and organising your finances can come as a bit of learning curve. Knowing how, what, where and when to manage your finances can take a bit of time as we all work differently and before you know it, the expenses pile up and you can easily get in a mess.
Also, this year the Government are introducing “Making Tax Digital” which is aimed at helping individuals and businesses get their tax right. With that in mind, I decided to make some changes to how I manage my finances and so far, it’s made my life so much easier.
1. Install an Online Accounting Software
I suggest this is the first thing you do and there are plenty of online accounting software packages out there. Most of these will include invoicing, time tracking, expenses, banking, bills and submitting tax returns.
Some of the popular accounting softwares are:
Most will give you a 30 day free trial and then you’ll look to pay around £10 – £15 a month. There are many training videos but to be honest, the software is easy to use.
2. Link up your business bank account
I was using Freshbooks up until recently but they didn’t have the banking facility. I now use FreeAgent which has the facility to link in my business bank account. This means I can go through each transaction and link up expenses and invoices (bank reconciliation*), it’s that easy you can do the bookkeeping yourself.
*Bank reconciliation is the process of comparing the amounts in the cash account in the general ledger to the amounts appearing on the bank statement.
3. Set up an expenses/receipt folder in your email
Filing email receipts as and when you receive them will save you hunting through your inbox later on.
You can usually download invoices into PDF format and then attach to the expense within your accounting software.
Some receipts do however come in the body of an email so I do a screen grab and save onto a word doc and then upload.
If you have monthly fees going out, once you marry up one invoice, the system knows to repeat for the rest of the transactions using the same details.
4. Use your business bank account for business transactions
If you use your business bank account for all business transactions everything will show up within your accounting software and the numbers will balance easier. Nothing will get missed either.
5. Take photos of receipts and upload straight away using your app
Hopefully by now you will have downloaded the app for your accounting software. Every time you purchase something with your card take a photo of the receipt and upload straight away. This will avoid you misplacing receipts.
6. Hire a Virtual Assistant
If the idea of organising your business finances fills you with dread then hire a Virtual Assistant to manage the process for you. As long as you send over all your receipts (see 5. and 6. above), the process will be plain sailing. Your Virtual Assistant can also help to issue invoices and send on your behalf to your clients.
7. Hire an accountant
Alongside my new accounting software I’ve also hired an accountant. It’s great having an expert on hand who can answer all those queries you might have, whether it’s PAYE, National Insurance or what you can claim, they will know.
I also wouldn’t know where to start with the Self Assessment and it’s a weight off my mind knowing my accountant will take care of everything.
💻If you want any help in setting up a new accounting software or would like help with your expenses then please get in touch today email@example.com.
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