For most small businesses, it makes sense to outsource their financial needs to a competent bookkeeper, simply to take the burden of this often fairly complicated area of finances off of their shoulders. If, however, you’re looking to handle your needs in house, there is some important things you need to know- here’s out top tips.
Keep track of what you spend and where.
Firstly, bookkeeper or no bookkeeper, it is absolutely essential that you keep track of all of your expenses. This can be more daunting then it should be, but bad tracking leads to claimable expenses not being claimed, and subsequently higher tax bills then necessary. This is an area where tools such as a business credit card can be useful, as it ensures that all expenses are grouped and kept together. If you intend to justify a larger amount of entertainment expenses, be sure to carefully categorise each of these, and make note of who, what, when and where the meeting took place. Most governments have become very sticky about travel mileage too, so it’s a good idea to keep a careful travel log when claiming.
Make major expenses a focus.
Life happens. Try and plan ahead- think about what could come your way in the next five years, be it replacement of vehicles or a premises upgrade. Bookkeepers advise that having a strategy in place to ensure that you begin making provision for these expenses early means that you will not be scrambling to find a large amount of cash for them later.
Watch your paperwork, or use a bookkeeper.
Bills that go a long time before payment can desperately hurt a small business. Make sure someone- either a bookkeeper, a good employee or yourself- is keeping track of billing, and that unpaid bills are followed up quickly. Have a plan in place for when invoices go unpaid, be it penalty fees, follow up calls or handing to a collections centre.
Make sure you record deposits the way they should be done.
No matter what form you use, from hand records to the latest of Sage’s financial offerings, make sure you know what gets deposited into your accounts. It may be a loan, personal capital, or a payment from a client- if you can’t explain to the tax man what they were, you will be charged income tax on them. Make sure you don’t over pay through sloppy records, or use a bookkeeper so you don’t have to track these things.
Budget for your taxes.
We always seem to get taken by surprise that we have to pay tax. Don’t let this happen to you. …Read More