Tips for managing small business accounting
Managing your small business accounting can seem like a daunting task. But, with a clear plan, it’s simple to keep track of your finances and get the information you need to help your business grow.
Keep an eye on your books
Taking the time to check out your books will give a clear picture of your business. Using a cloud accounting software with automated reporting is a clear way to get an overview of your finances without having to worry about complicated calculations.
Reporting can help you make decisions on whether you need to cut costs, or have the opportunity to invest in growth. Knowing your books well can help inform your budget for the coming year, or help you create a business plan.
Using the General ledger and Profit and loss reports can show where you have expenditure. Invoicing reports are an opportunity to identify your valuable customers.
Track your invoices
Staying on top of your invoices is key to business success. It’s easy to send an invoice and move on to the next task, but tracking whether your invoices are overdue can help you avoid late payments. Choosing an invoicing software that alerts you to overdue payments, allows you to send reminder emails and adds interest to overdue invoices helps you get paid as soon as possible.
Prepare for your tax returns
As a small business, you will need to pay different taxes depending on your company type, turnover, and whether you are a shareholder. Know which taxes you need to pay, when they are due, and prepare for them by setting money aside.
If you are required to meet Making Tax Digital regulations, you will need to submit your VAT Return using an MTD compliant software. The easiest way to do this is to choose a software that automatically generates your VAT Return from your bookkeeping, so there are less extra steps to submitting your return.
Although it’s natural to want to put your profits back into your business, it’s important to remember to pay yourself too! Don’t undervalue yourself – you play a key role in your business and should be compensated for it.
If you’re unsure what your salary should be, one way of deciding is to think about yourself as an employee. How much would another business pay for someone doing your job? As a starting point, try looking at job adverts to get an idea of what would be reasonable payment.
Get a great bookkeeping routine
Doing regular bookkeeping will help you keep on top of your finances. Keeping a bookkeeping routine means you won’t end up with boxes of receipts to record, or payments that you’ve missed.
Use a cloud accounting software
Choosing a cloud accounting software means you’re taking control of your finances. Bokio, the free accounting software, is perfect for small businesses!
Bokio has bookkeeping, invoicing and expenses all in one place. Our integrated approach means you have everything you need to manage your accounting without having to switch between software. Even better, we’re Making Tax Digital compliant, and you can submit an automated VAT Return in just a few clicks.
You can use Bokio on the go, and access automated reporting when you need it. So you know how your finances are doing anywhere, at any time.
Our step-by-step process makes it really easy to use, so you don’t have to be an accounting expert to get the job done. If you do have an accountant, you can invite them to work on your Bokio account together!