Starting your own business is an exciting adventure. You get to call the shots, work on something you’re passionate about, and enjoy the freedom of being your own boss. But alongside the fun stuff comes a whole list of responsibilities, including bookkeeping. It’s not the most glamorous part of running a business, but it’s definitely one of the most important!
Luckily, managing your business finances doesn’t have to be complicated. But there are a few easy mistakes that many new (and even experienced) business owners fall into. These slip-ups can end up costing you both time and money if you’re not careful. These are the 5 I come across most often, and my tips for keeping your books in good shape.
Forgetting to Keep Receipts
I don’t just mean the big ones. While most people will hang on to receipts for laptops, printers or large supplier payments, those smaller everyday costs are just as important. Think about it. All of those coffees after networking events or quick stationery top-ups add up over time. If you don’t track them, then your accounts won’t reflect your true spending. That kind of thing can throw your budgeting off completely.
Keeping every receipt, even the little ones, makes reconciling much easier, and gives you a clearer view of where your money is actually going. It also helps you maximise any tax-deductible expenses of VAT claims. And the good news is, you don’t need to hang on to endless piles of paper. Most accounting software allows you to snap a photo of your receipts and store them digitally. There are even apps you can use on the go, like Dext or Apron, that let you photograph the receipt as soon as you get it and automatically match it to the transaction, and throw the receipt away, so you have to do even less work!
Leaving Reconciliation Until Year-End
This might sound like adding more time rather than saving you any, but bear with me. Regularly reconciling your receipts and transactions with your bank account means that it’s a relatively small job – 15 minutes a week for some people. And it means you can catch issues and mistakes quickly, so they are easier to fix. But if you leave it all until the end of the year, it will probably take you days, and leave you in knots if something does go wrong.
Think of reconciliation as a little weekly check-up for your business finances – it keeps everything healthy and under control. And of course, if you don’t have that 15 minutes a week, that’s when you need to hire a bookkeeper. It also helps to spot any duplicate or fraudulent transactions that may have happened meaning you can retrieve the payments back a lot easier. It also means that you keep on top of late-paying clients more easily which will improve your cashflow.
Not Making the Most of Your Software
If you’ve invested in accounting software, it’s worth using it properly. Most platforms can do far more than just track income and expenses. Using the right software can help you to organise and categorise your finances, make payments directly and make your tax and VAT payments straightforward. If you aren’t sure what your accounting software can do, it’s always worth talking to either your accountant or a bookkeeper, so that we can provide training and support on using your software properly. We do offer training packages on software and apps.
Pushing Bookkeeping Down the To-Do List
Let’s be honest – most people don’t start a business because they’re excited about bookkeeping. I completely understand that it’s not everyone’s cup of tea. But putting it off can cause real problems. From missed client and supplier payments that go unnoticed, to late tax returns and avoidable penalties, procrastination in this area can be expensive. If you find yourself always pushing bookkeeping into ‘next week’s’ to-do list, it might be time to bring in a bit of support.
Trying to Do Everything Yourself
Delegation is the work of a good business owner. Past a certain point, it just isn’t practical to keep doing everything yourself, and plates are going to get dropped. Bookkeeping and accounts are usually the first things to be outsourced by small businesses because the benefits so massively outweigh the costs. If you’re struggling to keep up, let go of the bookkeeping and outsource it to a specialist.
At Bluebell Bookkeeping & Admin, I work with small and growing businesses who want to feel more in control of their finances. Whether you need help setting up a bookkeeping system, some advice on the best way to set things up or someone to take the whole job off your plate, I’m here to support you. If you’re interested in some support or just a quick chat, I’d love to help. Just get in touch to book your free, no-obligation consultation. I also offer power-hours for £99 + VAT if you just need the occasional support or advice.