How to be consistent with your bookkeeping
Keeping your books up to date is a key part of your business, yet it’s not everyone's favourite task! Whether you’re doing your bookkeeping yourself, or outsourcing that task, there are actions you need to take on a regular basis.
By having a regular weekly bookkeeping habit, rather than having to spend a weekend at the end of the month catching up, you’ll ensure your numbers are always up to date and easy to access when you need them.
10 to 30 minutes a week is all you need. I'd rather you did 10 mins a week than nothing at all. That way you don't have a mountain of paperwork at the end of the month or a long list of questions from your bookkeeper.
To make creating this weekly habit easy for you, I’ve listed the different tasks you need to do each week, depending on whether you do your own bookkeeping or outsource.
DIY bookkeeping
1. You'll have your bank accounts linked to your bookkeeping program, so at the end of the week there will be a list of bank transactions showing in your program. Your first step is to allocate each transaction to the right area e.g. expenses. Next, check that the balance in your bank account is the same as your program. If it's not, then a transaction hasn't been recorded correctly.
2. Look out for any cashflow issues (you’ll also be able to see if there is extra cash you can pay yourself sooner). Also, keep an eye out for any scam payments that may show in your bank accounts and contact your bank straight away.
3. Physical receipts/tax invoices - use a pdf scanner on your phone (I use the tiny scanner app), or take a photo, to email or upload any physical receipts or tax invoices to your bookkeeping program. If you're at a restaurant for a business-related lunch be sure to ask for a full receipt so you have all the information you need (i.e. alcohol vs food).
4. Digital receipts/tax invoices - email or upload any digital receipts or tax invoices to your bookkeeping program. Add any details to the transaction that will help in the future (for example number of employees and/or clients at the business lunch)
By adding your receipts and tax invoices to your program each week it will be easier for you to remember what a payment was for, and the details, e.g. working lunch - who attended and why. It will also be easier to find those records or to get a replacement if you realise one is missing.
The benefit of adding receipts or tax invoices to the transaction in your bookkeeping program is that you can easily review the transactions in the future.
This weekly habit will also mean:
· You don't have to wait to celebrate your goals - you can see them sooner.
· If you have a new service/product you can see how its performing financially.
· Your accountant/tax agent will love you for it. No chasing for information!
Outsourcing to a bookkeeper:
While there is less work for you to do when you’ve outsourced your bookkeeper, it's still a good idea to get into a regular habit of:
1. Answering any questions about bank transactions from your bookkeeper.
2. Uploading your receipts and tax invoices to your bookkeeping program, or emailing them to your bookkeeper - whatever you've agreed with your bookkeeper.
By adding your receipts and tax invoices to the relevant transaction in your bookkeeping program you can easily review the transactions in the future. Even if your bookkeeper is doing this task for you, it means that you fix any misallocations early on and have the receipt or tax invoice to hand to see what happened.
You’ll also still need to be on top of any cashflow issues and know if you can pay yourself sooner.
I'd suggest your bookkeeper does their work on a weekly basis, so you always have up to date information.
Practise makes perfect when it comes to developing a regular bookkeeping habit. The more you do these tasks, the quicker you’ll be, and the easier it will be for you to find and understand your numbers.
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