Start-up businesses often have little or no experience dealing with their own finances. It is always important for your business to start well and there are several bookkeeping basics you should follow.
Coleman & Co can advise all businesses in Lisburn or complete your bookkeeping and accounting ourselves. We ensure you always take the right steps with bookkeeping.
Regardless of what stage your business is at, you should always be preparing documentation for all transactions, operations and business events. By sourcing documents, this starts off your bookkeeping process to make future bookkeeping easier.
Documentation is given for many processes. Whether this is buying resources or borrowing money from the bank, your business should keep documentation safe. By keeping documentation of different transactions and events, you ensure the business has a record of all ongoing processes. Whilst this might not always be required, if problems occur they can be easily resolved with proof of documentation.
Whilst purchasing toilet roll or mugs for the office doesn’t seem like an issue, you should still keep the receipt. No matter how small or large, it is important to get into the habit of recording all expenses that occur.
By keeping the receipt, this gives proof of the purchases you made and makes it easy to keep on top of bookkeeping. Failing to keep the receipt only seems like a minor problem but as these small costs build up, it can affect your annual accounts or tax returns. Without the receipts, you will have to estimate these costs which could easily lead to errors.
In addition to recording your expenses, tracking the payments of all invoices is essential. Whether this is from an ongoing payment or one-off purchases, you must ensure customers are paying all invoices to avoid losing and wasting money.
When an invoice is sent out, your business should usually receive payment immediately. If this a direct debit, there shouldn’t be too many problems. However, you do not want to be chasing customers regularly for their payments. By tracking invoices at all times, you make sure all payments are made on time and that your cash flow is not an issue.
Failure to track invoices can lead to a negative cash flow. If you continue to spend but fail to see when customers have missed payments, it can cause massive problems for your business.
Create Your Bookkeeping System
No matter what experience you have, you should try to create a system that is easy to use. This may take time or you might need advice from expert bookkeepers. However, the sooner you find a suitable system, the easier bookkeeping becomes for your business.
Bookkeeping is the day to day process of recording your transactions and finances. Once you get into a routine and habit of successfully recording your finances, your system will become much easier to use. With accounting software also available, this can make it much easier for many businesses to find the best bookkeeping system.
Bookkeeping is not something you should leave for a few months before returning to it. By regularly keeping on top of finances, this process is made much easier. Regular bookkeeping will help you keep all accounts accurate throughout the year, preventing errors being made.
If you choose to take breaks between accounting, it can be extremely time-consuming. You will have to go back through all receipts, invoices and transactions to update your accounts. By completing all bookkeeping as it occurs, you make this process much faster.
Alternatively, you can always consider using qualified bookkeepers and accountants. Coleman & Co provide a range of accounting and bookkeeping services, working with businesses throughout Lisburn and the surrounding areas. Call our team today on 028 9266 3599 or fill in our contact form to make an enquiry.