Keeping good, up-to-date and accurate books has many benefits. Reminding yourself why it’s important to make a regular habit of delving into your figures can help you stay motivated despite temptations to work on more apparently creative business aspects. Accounting benefits include:
- Lower bills from your accountant, since they don’t have to spend time organising books before preparing reports.
- More accurate profit and loss forecasting to help capitalise on future trends or circumvent potential pitfalls.
- Loan applications more likely to find approval.
- Informed financial decisions bolster future plans.
- Easier tax return compilation, and more effective tax budgeting.
Synchronise Your Bank with your Accounts
Setting up synchronisation between your bank and your accounting software saves the time you’d normally spend manually updating each transaction. You will still have to explain each transaction and check for accuracy, but that needn’t take long if you do it regularly.
Keep Online Accounts Secure
Automating as much as possible makes the most sense for digital professionals. Online accounting packages allow you to access your accounts from multiple locations and device types, so whether you’re office-bound or on the move, you can stay in control of finances.
If you prefer to use your own software rather than subscribe to specialist online accounting services or cloud-based storage system like asset bank, make sure you have enterprise grade security that guards against hackers or malware. Microsoft, for instance, offers various subscription levels to business software that includes disaster recovery plans along with enhanced security through paired datacentre regions. At the very least, you should have built in redundancy for your business accounts, creating data backups and even backups of backups because they can also fail.
Ditch Paper Documents
HMRC makes things relatively easy for digital professionals by accepting photos or scans of records previously only kept in paper form. Both invoices and receipts can be safely filed digitally, but remember to name files in a way you’ll remember and which makes searching easy.
One method is to number invoices yourself rather than relying solely on the issuing name or receipt number. A simple numeric system does the job, or you could devise a code that includes the purchase date. Just write the number on the paper, highlight it so it stands out, then scan the document. Cross-reference in your accounts explanations by referring to your own assigned number.
Track Expenses Digitally
Use business expense tracking apps to help you keep accurate records during business travel. Some expense tracking apps can even dig out likely business transactions (if you link your account to services you use often). If any are missed, it’s relatively simple to go through your bank transactions and find them. Some are subscription based, others free to use, and some are more oriented towards employees while others are ideal for the self-employed or business owners. Explore the options, and find one that suits your individual needs.
Regularly Check Invoice Status
Regularly checking the status of invoices you’ve issued is a good habit to get into. With automated transactions, it’s often the only way to know if you’ve been paid.
One of the benefits of linking accounting software to your bank account is that you’ll see which invoices remain outstanding when you log into your accounts. It’s a simple and quick matter to dash off a friendly email reminder or send an invoice copy if necessary.
Constantly Assess Your Accounting Needs
Your accounting needs will change as the business changes. You may need to register for VAT, deal with PAYE if you take on employees, or find you need more complex reporting than is available through a simple spreadsheet.
You may also find that as business develops, you’re no longer able to keep up with running your own books, or you need some advice about how to expand your current accounting system. Professional bookkeepers and accountants can save you more than their fees in the long term, through well-prepared books, monitored invoice and expense payments, tax allowances claimed and timely tax returns submitted. If your business involves cryptocurrencies, you should certainly consider working with a professional who specialises in cryptocurrency accounting.
Getting into good accounting habits is challenging unless you love working with figures and are passionate about money matters. For many digital professionals, the creative side of business is far more interesting.
Knowing what good habits look like, and what you should be concentrating on along with where and when to get some professional help can lead to good bookkeeping that won’t take too much effort.