Top 7 HCA Book Keeping Tips
Hutchinson Cloud Accounting’s Top 7 Book Keeping Tips
Tip 1: Paperwork
Putting off paperwork is an option which many take but will eventually cost you more time and money. HMRC will fine you if you are late getting required information to them. Being on top of your book-keeping will help you maintain a healthy cash flow make good forecasts and allow you to spot financial problems before they become critical.
Tip 2: Keep proper financial records
As a minimum you need a Cash book to record payments into and out of your bank account, Sales invoice file and a Purchase invoice file. However you generate them, store invoices in chronological order. Keep those not paid at the front of the file to remind you to chase up or pay. Consider using the cloud to store documents but we advise clients to keep paper copies too. We love the free google drive but there are lots of cloud storage options. Get used to making notes on invoices about when you paid them and how (BACS, cheque, cash etc). We advise clients to get a fast Scanner to turn paper records into cloud documents.
Tip 3: Get an invoice or receipt for everything you buy
Statistically, the longer you are in business, the higher your chances of a VAT or tax investigation. They are normally nothing to worry about as long as you have a professional accountant on your side and all your paperwork available. And make sure you keep records (Paper or E-copies) for every transaction.
Tip 4: Keep your accounts clean – separate business and personal expenses
If you run a limited company, the business’s money is not your own, even if you own it 100%. You cannot spend the company’s money on your own purchases, unless they are a legitimate business expense. As a self-employed person you take drawings from your business, but you should still maintain a separate bank account.
Tip 5: Check bank statements
You should spend time checking your bank statement every month. Apart from combating the risk of fraud or a mistake by your bank, you will gain a better understanding of where you are spending money. Successful businesses have great credit control and spend money smartly – make this a habit from day one.
Tip 6: Put time aside to do your book-keeping regularly
Ideally make your bookkeeping a regular habit. Ideally put aside some time each day, but if this is not possible make sure you have a regular slot each week to keep on top. If your struggling, consider a bookkeeper to help. They will reduce your accountancy bill and allow you to focus on making money not paperwork. Using online or software accounts package takes much of the pain away. HCA can help you to understand what you need.
Tip 7: Get help with your finances
A good accountant will save you more money than they cost. If they can’t or they’re not proactive enough, find a new one. Professional codes of conduct make it easy to switch.