As a small business owner you’re going to be wearing many different hats. Multi-tasking becomes your middle name as different priorities jostle for your attention.
And one of those hats will likely be ‘bookkeeper’.
However, unless you happen to be setting up in the bookkeeping business itself, it’s likely that bookkeeping isn’t your first love. In fact, it may be a term that you’ve relegated somewhere in the depths of your mind as fairly unimportant.
Unfortunately, bookkeeping mistakes tend to be expensive ones. They cause pressure on your time and resources, and have a nasty habit of eliciting fines from our friends over at HMRC.
So, how do you keep your head straight and avoid mistakes in your bookkeeping? Have a look at our helpful tips below to find out.
Keep bookkeeping simple
In essence, bookkeeping isn’t complicated. It’s simply the act of systematically recording every financial transaction to do with the business.
Bookkeeping differs a little to the generic term ‘accounts’ as bookkeeping are the ledger. Your ‘accounts’ are instead the summary of everything: the bigger picture.
Bookkeeping is about the details. It’s up-to-date and it’s comprehensive. However, getting your accounts in order is going to be mighty difficult without some fabulous bookkeeping beforehand.
At its most fundamental level, the crucial thing is accuracy. Accuracy is much easier to maintain if you do little and often, and make bookkeeping a regular small task.
Know what you need to do
As a bookkeeper your task is to record each and every transaction. So all purchases, and sales, must be recorded.
This used to be done in huge ledgers, then spreadsheets and now more commonly, bookkeeping software. Behind this record should be a document (physical or electronic), which details the transaction. This might be an invoice, receipt, bank statement, or the like. Ultimately, this string of records provides what will become known as the ‘audit trail’.
Beyond this, bookkeeping tasks may also encompass a range of other tasks such as credit control, banking, VAT returns and payroll.
Keeping accurate books, from the day of your business’s conception, is the firm bedrock of success. You could opt for an independent bookkeeper, but in most instances, with the right software such as Pandle, you really don’t need to.
Don’t let the fear of boredom, or your busy-ness, put you off bookkeeping. First up, bookkeeping only becomes boring when you don’t keep on top of it.
Keep on top of the books and you’re talking a few minutes here and there. Let it stack up and you’re looking at a rather dull Friday evening when you’d rather be anywhere but stuck with a wedge of receipts, invoices, and your laptop.
Do you need help with your bookkeeping? Our cloud accounting software, Pandle, focuses on creating a simple experience tailored especially for small business owners and freelancers. If you’d like to simplify your bookkeeping and reduce errors, sign up for free today.