Whether you want to ensure that your books are always accurate, always ready to help you deliver financial insights about the business, or you want to make sure that you’re well prepared for the arrival of the taxman, up-to-date bookkeeping is essential. You don’t want to go through the hellish crunch leading up to tax season, where a rush to update your books can lead to stress and, even worse, mistakes with your finances. For that reason, here are some key tips on up-to-date bookkeeping to keep in mind.
Make it routine
To ensure that you’re not falling behind, the simplest solution is to schedule a time that you’re actually going to sit and manually update your books. Set aside a block of time every week (we recommend before lunch since that’s when most of us are fresh and ready to get started) or a day of every month to update all of your books. This also offers a good opportunity to see how your cash flow is changing from month to month and to keep better track of invoices that haven’t been paid yet so that you can chase up your clients when you need to.
Organisation is crucial
Whether you’re keeping paper or digital copies, it’s essential that you know where the details you need are when it comes time to update your books or if you need to justify them. This includes keeping books, invoices, petty cash accounts and receipts organised by month so that it’s easier to hunt down specific details when you need them. You should keep a separate storage for receipts and invoices that haven’t been integrated into your bookkeeping yet. Otherwise, it’s easy to miss factoring them in, which can lead to mistakes down the line. We recommend keeping both paper and digital copies, with one of those digital copies of your records kept on the Cloud so that if you lose the old copies, you still have backups to rely on. Scanning your paper documents can make them much easier to manage.
Take the time to reconcile your books
As part of your routine, you should ensure that you’re matching the information in your books to the transactions as seen in your bank account. This can be an excellent way to make sure that your books are accurate and to prompt an investigation when they don’t match up. Ensure that your books account for invoices and ongoing bills that haven’t been paid in or out yet. It’s also wise to make sure that you keep a separate business account from your personal account, so it’s much easier to avoid getting mixed up on which expenditures are personal and which are for the sake of the business. Accounting software can even import bank statements directly to help you see where they do and don’t match up.
Make use of bookkeeping software
You might think that you have an organised, effective system written down in your notepad and, for all that we know, that might be true. However, it’s far from the most efficient way to handle your books. Bookkeeping software like Xero isn’t just business-ready, but it also contains a slew of automated features that take a great deal of the work out of bookkeeping for you. If you’re uncertain on how to use the software that you need, The Bookkeeper Hub offers video training sessions for Xero. Whether you want to know how to get started with the software as soon as possible, or you want a full professional bookkeeper level of training, we can help you make the best use of the best software currently available.
Hire a bookkeeper
We’ve kept this tip for last because we know that many business owners will want to try everything that they can to avoid spending money. The tips above can help you more easily keep your books up to date on your own, but you might discover that you simply don’t have the time for it and you want to focus your energy on improving and growing the business. Fully trained, Cloud-software connected bookkeepers can help not only ensure that your books are always kept up to date but can also reduce the amount of time you spend on bookkeeping by up to 95%.
If you want to make sure that your books are always fresh and up to date, The Bookkeeper Hub is here to help. Whether you want someone to take your bookkeeping off your hands as much as possible, or you want to learn how to efficiently and effectively manage it yourself, don’t hesitate to get in touch.
