You’ve just started your own sole trader business and you’re full of excitement and keen to get on with doing what you love, and that’s probably not bookkeeping. Good financial records are the foundation of your business and could determine its success. Following these three simple steps will mean that bookkeeping is no longer a burden.
A lost receipt could make all the difference when it comes to self-assessment time. Dedicating a small amount of time each week, you might only need an hour, to manage your bookkeeping will mean that you will always be in control. Even if you outsource your bookkeeping, spend some time each week getting your receipts and invoices in order, this will save your bookkeeper time and reduce the number of questions you’ll face. Having up to date and accurate financial information also means that you can better judge its performance and make more informed decisions.
Whilst not legally required as a sole trader, setting up a separate bank account for your business will make it much each easier to separate your finances when it comes to completing your self-assessment return. And while we’re talking bank accounts, filing bank statements in chronological will make your, and your accountants, life much easier and help you identify any that are missing.
Two key areas where it will pay to be organised both relate to invoicing, both those you receive and those you issue yourself. Paying your suppliers on time will keep them happy and a good way of managing this is to keep two files, both in alphabetical order by supplier, for unpaid and paid invoices; when you pay an invoice write the date and method on the invoice and move to the paid file. When it comes to your own sales, making sure that invoice as soon as you’ve completed work and that your invoices contain complete and accurate information will help your clients to pay you on time, which is good news for your cash flow.
Prefer to concentrate on what you’re good at and enjoy? Get in touch to learn more about how outsourcing can help your business.