If you run a business of any size, you know how important it is to keep track of your spending. Not just to make sure you aren’t overspending, but to make sure you can report your expenses accurately to HMRC when it’s time to file your accounts or self-assessment.
As much as we tell ourselves that we’ll get to it eventually, by the time it comes to filling in our tax returns, there are often still receipts lingering in every nook and cranny of our homes. Or, if you’re like many trades I’ve worked with, crammed into a shoebox or on the dashboard of the van faded by the sun.
Some shoeboxes, of course, aren’t shoeboxes. Some are file boxes, plastic wallets, carrier bags, spare drawers or even the glove compartment of a van. Wherever you store your receipts, if they’re together and not in any sort of order, then you know exactly what we’re talking about. It’s bad bookkeeping, through and through, but thankfully it can be fixed, and make it much easier for you and your accountant when it comes to the year end.
Deal with the Carrier Bag
Or shoebox, or envelope, or fistfuls of receipts you can’t hold onto anymore. It can happen to the best of us, especially if life gets in the way. But one way or another, it does need sorting out. You just need to be systematic about it.
Start by picking up the very first receipt your hand comes into contact with. Write down the day, month and year on a sticky note, and put it on the receipt. Do the same thing for the next, and the next. If you find one that’s the same month and year as one you’ve already done, then put it in the correct pile. Do this for every month of the tax year, put them all in order and watch the piles grow. It’s then a matter of scanning them in and matching them all to your bank statements.
Or, if you really can’t face the task, hand them to a good bookkeeper and let them handle it for you. Don’t worry if you’re in a mess – I can sort you out.
Better Bookkeeping Habits
Once you’ve waded through the piles, it’s time to make sure it doesn’t happen again! There are a couple of ways to make bookkeeping easier, even for the newest of business owners. It’s time to get serious, which means actually using some software, and maybe even hiring a bookkeeper.
First things first, make sure you have a proper filing system in place for all of your receipts and invoices. There are two ways this can look. If you want to go analogue, keep them in dated folders or envelopes, in a box file that’s only used for business paperwork. This makes it easy to identify what receipts belong to what time, and should make it easier to match up with your accounts when it’s time to do the tax return.
Or, you could be a bit more modern, and use software! Almost all accounting software now allows you to scan in receipts and match them to transactions on your bank statements. Isn’t that clever! If you can get into the habit of scanning receipts as soon as you get them, you don’t even have to keep the physical copies. My other half is my best trained client- as soon as he fills his van up with diesel he gets back in his van and takes a photo of the receipt and uploads it to Apron. And the same with any other receipts! Digital invoices can be uploaded in a similar way – or if you use software like Dext or Apron, you invoices can be taken and uploaded automatically. So even less work for you. They also allow invoices to submitted by email, or we can ask suppliers to copy in the email address when they send you the invoice. All a huge time saver for you!
Either way, schedule a bit of time in your diary every week, or month, to update your books. Not only does this keep everything together and make your year end accounts much easier, but you could actually use the information it gives you to grow your business. Stop holding yourself back, and watch how your business can bloom by just having the numbers tell you what is and isn’t working.
At Bluebell Bookkeeping & Admin, I meet a lot of business owners who run their business out of a carrier bag, exercise book or spreadsheet. In fact, I’ve recently completed redoing a whole financial year for a client as it was such a mess and they uploaded 699 sales invoices and 451 purchase receipts to Dext in 2 days- it CAN be done! But it doesn’t have to be that way. I can help you sort through the piles, pull it all into an online bookkeeping process and design a new process that works for you. I can even manage your books for you going forward, so you don’t need to worry about that aspect of your business at all. Just relax, and focus on doing what you do best. To find out more, just get in touch with me today.