3 key bookkeeping mistakes all SMEs should avoid
If you run your own SME, then chances are bookkeeping is not one of your favourite jobs! For many small business owners it is a necessary evil that takes up lots of valuable time. Of course, it is vital to do in order to keep you compliant with the law and make your annual tax returns easier to manage.
Bookkeeping however is a kind of secret tool in your business kit. It gives you a superb chance to assess your company's finances and see real-world data to base any future financial planning on. Of course, this can only be achieved by proper bookkeeping that provides accurate figures.
Here are 3 common mistakes to avoid when doing your books.
1. Poor record keeping
A key aspect of bookkeeping is making sure you keep up to date with it. Not making a note of those small expenses or hanging onto the receipts can soon add up over the year. When you think this is money effectively lost by your business, it is no joke. Make sure to have a proper filing system set-up for all your accounts and regularly update your records every month. This will keep your books in good order and avoid a whole load of work when your tax return looms.
2. Not backing up your data
The modern business world is led by technology and bookkeeping is no exception. Most businesses will at least use an Excel spreadsheet to record their details, if not a dedicated accounts package. This saves lots of time and effort but do remember to back up your saved data also. Computers have a nasty habit of losing the information you need sometimes and this will prevent it from being too much of a problem.
3. Incorrect categorisation of income and expenses
Bookkeeping is a complex and formal process that requires in-depth knowledge to complete accurately. If you do not fully know what you are doing when it comes to this area, it could lead to you categorising your income and expenses wrongly. This is not only an issue for the poor data it then produces but could also have a financial impact when it comes to your tax bill.
If you are based in the Sussex area and need professional help with bookkeeping, give us a call. We have many years of experience in this area and can ensure your books are done right, every time.
To discuss your small business bookkeeping needs in Sussex get in touch with our Business Services Partner Robert who can discuss the change with you:
Tel: 01825 763366
Self assessment tax returns, what you need to know
We are fast approaching the self assessment tax return deadline. If you are self employed or in receipt of other income or gains, you will need to file a return and pay over your tax liability. This article will discuss who needs to complete and file a self assessment tax return
Making Tax Digital – are you compliant?
Making Tax Digital will become a reality in 2019, after a series of delays and debates. From the 1st of April many businesses will have to comply with new processes. In a series of changes to the tax system, HMRC is hoping to bring about a more efficient, effective and easier process for businesses and individuals.
Sign up to receive our private content
straight to your inbox