Every business needs to keep its paperwork straight, not to keep the accountant or HMRC happy but to tell the business owner how the business is doing.
Basic information from your accounting records should show:
- · How many enquiries you are receiving and orders won
- · Time taken to get work completed
- · Volume of business
- · Amounts owed and owing
- · Cash flow needs
- · Profitability
- · Break even being exceeded (or not)
Keep it, Post it, File it: Follow a system
Successful bookkeeping needs a process. But what is that process? The flow from enquiries to completion of the job or service needs to be fully understood and the accounting at each stage clear.
Just what are those key stages, will vary from business to business. Regardless of how simple or complicated your business, basic steps common to all may include:
- Initial contact
- · Agreement of terms
- · Arranging date of supply or delivery of service
- · Organising supply of materials
- · Delivering the customer needs
- · Collecting payment
- · Paying suppliers, contractors or employees
· All of the data surrounding these steps needs to be recorded and entered into the business accounting systems.
When should I do it?
Little and often is more successful then leaving it till you “get time”.
Grabbing the data in the first instance is key, recording it before you lose it or worse forget it. Then supporting paperwork has to be filed away so can be retrieved easily. Remember HMRC expect you to keep it for six years!
But I hate paperwork!
For many small businesses the process of “doing the books” is a painful one, but it is essential. So what can you do to keep on top of it?
Make sure you know why you are doing it. Attending our accelerator workshops is a good place to start, ask us and we will recommend some background reading for you. Then look at the ways the process can be improved.
There are many software packages that can really speed up the book keeping process. We recommend Xero, its bank feeds really cut down inputting time and give great reports. You can also use it to generate invoices, email to your customers and have links to “pay now systems”. Others software packages are available.
Add ons such as Receiptbank allow you to process incoming invoices from suppliers directly into Xero with little manual intervention. You have to spend time setting them up initially but they save a lot of time later.
We have also been using a product called Docurec which allows you to scan, then import manually created invoices as well as purchase invoices into popular accounting packages.
If you don’t like “doing” paperwork, these add ons do the hard work for you. Instead of punching in numbers you will be looking at the results and considering how your business could be running better!
I still can’t face it!
If even automating tasks is not for you, then outsource your book keeping. If you do this you still need to look at regular reports. Delegation is not to be confused with abdication.
Our passion is to help you understand your numbers. If your accounting is not giving you relevant and up to date reports on how the business is doing, then talk to us about it. Together we will get the process fine tuned so that you experience totally stress free accounting.
To arrange a free no obligation review meeting contact Jane@grugeonreynolds.co.uk or call 0800 026 4436 or book for our next worksop on the events page.