Software, spreadsheet or manual records, which is the best for you? Depending on the size of your business and your capability, which system is best for you? This is always something you should think about. Are you going to be completing the book-keeping for your business or are you going to give this to your accountant?
As there are so many questions to think about when you first set up, we’ve put together a few tips on the basics you need to complete for the successful running of your business.
Keep up to date on invoicing your customers, and do this as you do the job, weekly or monthly. Make sure that you provide payment terms and methods on your invoices as more people are paying online so you are likely to be paid quicker. If you are VAT registered you need to make sure you clearly mark this on your invoice and show your VAT number. You will need to show the gross, VAT and net on your sales invoice. If you are producing zero rated invoices state this.
Whether you use software, spreadsheet or manual bookkeeping, always mark customer invoices as they are paid to you. You should always know who owes you money so keeping this up to date is vital.
You need to get an invoice for all goods as you purchase them. Record them on your own system, and if you are VAT registered, remember you need to separate the net, VAT and gross. Mark them as they are paid so you know who you owe money to.
Where there are any purchases of fixed assets or large repairs, mark clearly on your bookkeeping so they can be dealt with correctly in the accounts at the end of the year.
The bank needs to be reviewed and reconciled on a regular basis to see who is paying you, who you are paying, and what your cash flow is.
A weekly reconciliation would be recommended to keep it all up to date, and reconciling the bank will, in turn, help get all customers and suppliers up to date.
If you are using software, you can record all re-occurring entries like direct debits and standing orders to keep your book-keeping time down.
Whether you use a manual or computer system, as long as you keep this up to date you will have a better understanding of your business – especially if you are VAT registered as you have to complete VAT Returns as required.