Mistakes in accounting can seriously impact on your small business, and that’s why you should always hire a good accountant to manage your financials for you. However, you can take steps to keep things in order by avoiding the most common errors.
Each time you issue an invoice to a customer, you record an entry to show that they owe you money. When you check your accounts, you will see what that customer’s outstanding balance is, and each time they make a payment, you check it off as paid.
If you’re busy, it’s very easy to neglect keeping these records up to date. As a consequence, when tax return time arrives, you have a pile of deposits in your revenue account and a balance sheet that doesn’t actually balance. Get into the routine of updating your accounts received files weekly to save you time, money and headaches in the long run.
Always keep and file your business expense receipts. There is nothing worse than looking at a bank statement and having no idea what that £50 payment was for. You are then left guessing at the reason for the expense and potentially misreporting it on your accounts.
Every time you make a business purchase, keep the receipt. To ease the burden of filing all those little slips of paper, keep an envelope in your briefcase or car and use it specifically for this purpose. Clip receipts together in date order, and make it a habit to file them away each week in your tax folder.
3. Tax self-assessment
Many small business owners try to save money by managing their own tax returns and accounts. This can be an expensive mistake if you get it wrong. It’s often more economical both in terms of time and hassle to hire a firm of chartered accountants to do your tax return for you.
You can make sure that your business accounts are kept in good order by following the tips given above. For more advice and information, why not contact the helpful accounting professionals at Dunkleys Accountants now