Keep on top of the Paperwork
As with many things, the art of keeping control of your bookkeeping is to have a regular routine. Once this routine is established, you’re not only fulfilling your legal requirements but will have a solid knowledge of where your business stands financially. This is vital for future success.
The key to keeping things simple is to make a habit of filing all paperwork as it is received. Once the post is opened, the financial paperwork should be filed straight away. Any purchase invoices received by email, online receipts and statements should either be filed electronically, or printed off and filed manually. This also applies to any till receipts accumulated.
Dealing with the paperwork on a daily basis saves hours of time collecting it together and searching for missing documents in the future.
The following is an example of how this can be achieved.
- Sales Invoices – If you use a computerised accounting system, these will be stored within it (there is no need to print them out). If not, either keep copies filed electronically or manually in a folder marked “Sales Unpaid” and move to “Sales Paid” once payment has been received, noting date and payment details.
- Other Income (including loans etc) – All relevant paperwork should be kept in a labelled file.
- Purchase Invoices – All purchase invoices received from suppliers that don’t need to be paid straight away should be filed in “Purchases to be Paid” and then moved to “Purchases Paid” once you’ve paid them, noting date and payment details.
- Till Receipts/Online payment Receipts – these can be filed straight into “Purchases Paid“
- Travel & other Expenses – If these have been paid from your personal account/cash, keep a plastic wallet for each month so that one expense claim for the whole month can be entered into your accounts. Encourage staff who claim expenses to do the same.
- Bank Statements – File these manually or electronically. Either subdivide one file for any separate accounts or have a file for each.
- Owners Drawings/Investments – Keep a record of all the money/goods taken for your personal use as well as any personal money/goods invested in the business.
- HMRC Correspondence – It is often worth making a file specifically for this so that it can be found easily
Using the above filing system will give you some idea of your cash flow at any given point without even entering the details into your accounts. You can see how much money is due in and due out using the Sales Unpaid and Purchases to be Paid files. You can also carry out credit control using the Sales Unpaid file.
At some point the incomings and outgoings have to be recorded, whether that’s into a notebook, spreadsheets or a computerised system. Ideally, enter the details before they are filed in the correct folders on a daily basis but weekly can be sufficient. If it’s left to be done monthly (or even longer), the job can become daunting and time consuming as you, or whoever does the bookkeeping, tries to remember what certain transactions were for.
Make keeping your books in order much easier by creating a routine which means only a little is completed at any time but it is carried out regularly.
1. Keep your filing system simple.
2. Keep your files within easy reach, along with a hole punch and a stapler.
3. Once you pick up a piece of paper/electronic document, do whatever is required and file it.
May 26, 2014