Essential Tips On Bookkeeping While Running A Small Business
Oct. 15 2021, Published 4:55 a.m. ET
Not many of us are too eager to deal with accounting and bookkeeping responsibilities if we are running a small enterprise, and you’re probably not, either. But it’s a necessary task if you want to move forward and ensure that your finances are in proper order. After all, your finances are your business’s lifeblood, and if it is poorly managed, it could spell disaster. Unfortunately, it could also be easy to make mistakes and errors if we are not trained in it. Fortunately, there are ways for you to avoid these errors, and a little knowledge can go far indeed. But what are these common accounting errors made by business owners, and what can you do to avoid them? Let’s find out.
Improper books management
Without a doubt, bookkeeping is one of the most important tasks you have to perform. If you do it correctly, you can have a thorough overview of your finances and how your business is faring. With this, you can make sound decisions and invest your money more wisely. But if you don’t do it correctly, it can be heavily detrimental to your business.
One of your foremost tasks should be to have the most comprehensive and complete books so you can use them as a reference when need be. Although you can do your books on paper or spreadsheets, it’s better to use accounting software nowadays. If you want to be more thorough with your books, you can have an accountant deal with it for you, and they will use the proper software from the start. Accountants in central London from Griffin, Stone, Moscrop & Co will, for example, ensure that you can benefit from the right software, but this is just the tip of the iceberg – an accountant can do so much more.
Not keeping updated with changes in taxes
The tax regulations in the UK change from time to time, and this is already a given. But some business owners don’t keep themselves updated with what’s going on, and come tax time; they are faced with substantial penalties and fines. This is because the laws on taxes are dynamic, and it’s your responsibility (or your accountant’s responsibility) to keep abreast of the rules and regulations from one year to the next. One thing you can do is pay as close attention as possible to HMRC updates and look for news on the Internet regarding any changes to tax structures and regulations in the country.
Investing too much time in your accounting tasks
Whilst it is a definite plus to know how your business is doing financially, there is still such a thing as investing too much time in your accounting tasks. Time is precious, and, more importantly, time is money. If you work too much on making sure your finances are in order, you could be wasting your time and not paying enough attention to your clients, business practices, marketing efforts, and more.
You can, of course, invest a little time each day to check your finances. But afterward, you need to focus your attention elsewhere. If you can’t do it on your own, the simplest solution is to enlist the expertise of an accountant. It may be an additional expense, but you may be doing more damage trying to do it all independently.
This post was written by Sophia Anderson and originated on Your Coffee Break.