If you’re self-employed then managing and updating your accounts isn’t necessarily something you like to do. It is, however, something that you have to do, not only for regulatory compliance but also to ensure that your business is running successfully. ‘How to do accounts’ is probably a common question you ask yourself, especially if you don’t have the luxury of a bookkeeper or accountant.
The first thing that you need to do is to put a system in place for preparing the books. If you follow the system you’ll have your accounts accurate and up to date without missing any transactions. It could be as simple as setting aside the first of every month to enter receipts from customers but at Big Red Cloud we recommend that you implement the following into your ‘how to do accounts’ system.
A sale is never a sale until it has been invoiced. Therefore in order to generate a cash flow and to keep track of revenues a customer should be invoiced as soon as possible. For ease of reference, every invoice should include a number that can be entered and referenced when preparing the books at a later stage. It is vitally important that whenever revenue comes into your company that you know where it is coming from and by extension, who still owes you what. Big Red Cloud’s online accounting package allows for the emailing of raised invoices to customers as well as the automatic generation of reference numbers. This saves you time and ensures that your bank account and books are in good health.
The next step is to ensure that your VAT is being recorded properly and promptly. There are different VAT rates that apply to the sale of goods and services depending on what category they fall into. Big Red Cloud allows for simple and easy setup of multiple VAT rates so that no matter what transaction is taking place, you records will be accurate. Not completing your tax returns can lead to major time loss headaches as well as stiff fines from revenue.
Recording outgoings and expenses is naturally important. To make this process as easy as possible you should always file your receipts, even the small ones, in a place that isn’t your wallet, handbag or coat pocket. Set aside time to scan each receipt so that you have an electronic record of each outgoing. That means that even the small amounts will be present for you when you set aside time to prepare your books and your time won’t be spent trying to figure out where all of that money went to when it left your bank account.
Working to a system with these simple steps should take most of the pain out of doing your accounts. In essence it is really all about being organised, both in how you reference your paperwork and in the use of your time. Big Red Cloud is an accounting software package built to help and enable small businesses and their owners. With anywhere and any time access, you can view and update your books no matter where you are, whether you’re on the road meeting clients or suppliers, or even on holidays, for once. We provide an unlimited subscription so as your business grows and you invoice more and more sales, you don’t have to worry about spending more money to upgrade. With inclusive automatic updates, you won’t have to fork out anymore for the latest software either. So if you want to put your new how to do accounts system to the test, you can try our accounting software completely free for 30 days.