It’s crucial for all businesses, big and small, to keep on top of their accounting. The first reason is so that they may accurately document how much they’ve earned and spent during the tax year. And send the right income, expenses, and tax calculation to the government by the proposed deadline.
Moreover, keeping company accounts in order ensures;
- Business owners pay their staff the right amount and on time.
- They can see how the business has progressed over time financially.
- They can set forecasts for the company’s future.
- And keep a financial footprint of the business’s activities.
To keep on top of your business accounts, here are five simple strategies to help you streamline and save time on accounting.
- Invest in Accounting Software
According to Quickbooks, business owners could save 8 hours a month if they used accounting software. Accounting software often consists of the following perks and benefits, which helps simplify accounting;
- View business bank transactions in one place.
- Track and send professional invoices.
- Upload receipts and track expenses.
- Manage payroll.
- Calculate and manage VAT.
- Avoid fraudulent activity, such as forged checks.
In the UK, vat registered businesses will have to use Making Tax Digital software to submit returns to HMRC by April 2022. Eventually, all business owners, including sole traders and the self-employed will need to do this also.
If the above applies to you, consider searching for accounting software or QuickBooks hosting services in your country so that you do not only cut down the time spent labouring on account tasks but to also comply with the law.
- Open a Separate Bank Account
Having expenses, or invoices paid into your account, among household bills and personal purchases, will make accounting much harder than it needs to be.
If you want to simplify your accounting activities, set up an account, separate from your personal account exclusively for all business-related transactions.
If you are the director of a registered company, you are often required by law to set up a separate official business account, to keep track of all the companies income and outgoings.
Self-employed individuals, however, may be able to open a separate regular account.
To check if any business banking rules apply to you, contact your local government for more information.
- Keep Payments Digital
If possible, try to keep all of the business’s outgoings and income digital. Because adding cash to the mix can make the accounting process very complicated.
As such business fundraising, loans, credit cards, savings for the business should be kept in digital form and occur only in your business bank account.
- Hire an Accountant
Depending on the complexity of your company and the revenue your business generates, it may be wise to consider hiring an accountant experienced in the challenging areas you’re unable to navigate.
There are various areas of accounting that without prior study or research, company owners may not be aware of.
For example, in England, income is taxed based on the amount received. For those earning over £100,000, they could be subject to 60% tax!
To help steer through accounting issues such as this, it’s wise to consider hiring an expert accountant you trust to manage your business’s financials.
- Start Now
It’s important, if you haven’t already started, to begin simplifying your accounting process with the tips above now. So that you can quickly begin diverting your attention to other areas of the business that need it most.
From sourcing accounting software to setting up a bank account exclusively for your company. Each step taken to simplify your accounting will go a long way in helping to eliminate time spent keeping on top of payroll, tax calculations, financial forecasts, and so forth.