Taking the pain out of accounting
Take your eye off them for a moment and accounting records can develop a mind of their own. Duplication transactions sneak in, expense receipts go walk about and before long your neat and tidy accounts have become messy. That is going to cost you time and money if you do not put some accounting ‘hacks’ in place.
The first hack is to never mix your personal transactions with business ones. Using the same bank account for both will make your accounts unnecessarily complicated and life harder for your accountant. Always retain documents that detail expenses and keep them organised – that way they can be converted quickly and easily into a readable set of accounts.
Time equals money
Doing your annual accounts in a rush is going to cost you money in the short term. So many people put off doing their accounts for as long as possible, leading to the inevitable panic at the end of the tax year.
If you get organised and get in before the rush, your accountant is likely to charge you less. It also means you are putting your accountant under less pressure and giving them all the time they need to go over your accounts, making it more likely they will spot any mistakes.
The devil in the detail
Another top tip is to never assume you have given your accountant enough detail. Bank statements alone do not give accountants all the information they need to make sense of transactions.
For instance, you may find that you have costs deducted on your income before payment of a net amount. A bank statement is not going to tell your accountant this as it will only become obvious when they look at other documents.
Your accountant needs details of all income and expenses that are due, even if they are unpaid. The more detailed a picture you can give them of your accounts, the better they can do their job.
Manage your assets
Make sure all the assets you acquire in a financial year are easy to track by setting up a fixed asset register. If you don’t, you could miss out on capital allowance claims, which could make your end of year tax bill higher.
Keep meticulous records of all transactions, including petty cash so you can claim input VAT. Have a process to manage your financial information and establish good habits, such as processing invoices promptly and updating and reviewing accounts regularly, as this will make accounting simpler.
Following these steps will help prevent costly mistakes in the future, which can easily be made if your accountant is being forced to deal with information that is either out of date or just plain wrong.
Focus on the process
Take the stress out of account submission by using a cloud-based accounting solution such as Big Red Cloud. It can be accessed from any location, making it easier for you to keep track of your records wherever you are. It will also make it easier for your accountant to check and submit your accounts, making it cheaper in the long run.