Keeping your books is a difficult thing to learn when you begin your own business, and a skill that is so important. Here at The Women’s Organisation we know how vital it is to keep your business books in order, that’s why we have our Basic Bookkeeping half day course which will provide you with all the information you need to start becoming that business owner who always has their books in perfect order.
In the meantime, we’ve sourced a fantastic article from Entrepreneur, and written by Eileen P. Gunn, on adopting some habits to keep you from making costly mistakes!
Entrepreneurs keep a lot of the financial details of their business in their heads. Doing so has its advantages: No new software to learn, no danger of a system crash that loses all your data, and you can tweak your budget as often as you need without sitting down at a desk.
But when you don't have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits. It can also help you to stay out of trouble with the Internal Revenue Service.
Here are five bookkeeping tips for entrepreneurs.
1. Plan for major expenses.
Why it's helpful: You're less likely to miss business opportunities or have to scramble for a loan when the expenses become unavoidable.
What to do: Put events like a major computer upgrade on the calendar a year in advance or, ideally, three to five years ahead. Acknowledge the seasonal ups and downs, something many entrepreneurs are reluctant to do.
You'll avoid taking money out of the company during the flush periods only to find yourself short in the slower months, when costly projects like upgrading computers or replacing factory components usually happen.
2. Track expenses.
Why it's helpful: You otherwise might some miss tax write-offs and may lose out on others.
What to do: A credit card that you use solely for business can be a basic accounting system. Most card statements categorize expenses, so you can see which outlays relate to which business activities. If you always use your business credit card for business expenses, you're less likely to pay cash at, say, Staples and lose the receipts, forfeiting tax-time write-offs. Pens and printer paper can add up.
3. Record deposits correctly.
Why it's helpful: You may be less likely to pay taxes on money that isn't income.
What to do: Adopt a system for keeping your financial activities straight, whether it's a notebook you use consistently, an Excel spreadsheet or software such as Quickbooks. Business owners typically make a variety of deposits into their bank account through the year, including loans, revenue from sales and cash infusions from their personal savings. The trouble is that at the end of the year, you or your bookkeeper might erroneously record some deposits as income, and consequently pay taxes on more money than you've actually made.
4. Set aside money for paying taxes.
Why it’s helpful: The HMRC can add penalties and interest for not filing quarterly tax returns on time.
What to do: Systematically put a portion of money aside throughout the year for taxes. Then note tax deadlines on your calendar, along with prep time if you need it, to make sure you actually make payments when they're due.
5. Keep a close eye on your invoices.
Why it's helpful: Late and unpaid bills hurt your cash flow.
What to do: Assign someone in your organizations to track your billing. Then put a process in place for issuing a second invoice, making a phone call and perhaps levying penalties such as extra fees at certain deadlines. Some entrepreneurs believe that once they've sent out an invoice, they've taken care of billing. But, every late payment is an interest-free loan and hurts your cash flow.
The Women's Organisation have taken steps to offer key business skills training to women beyond our usual Merseyside centred business start-up programme remit.
We will be holding 'Basic Bookkeeping' workshops. Whether you are starting a business, recently started or an employee of a business who feels they would benefit from developing these key skills, women are welcome to book a place. We are heavily subsidising these courses to the rate of just £20.
Some of the women who have attended the course have told us:
'This has allowed me to take and keep control of my business without me feeling so stressed about 'professional' matters'
'I feel much more confident doing my own accounts'
'This was something that worried me, however I feel quite confident now.'
This course will guide you through:
The current requirements of HMRC when recording your accounts
How to create an easy to use recording system for your Business accounts
How to create a monthly/annual budget or report
Getting hands on practice using our resources
You will leave with a resource pack that can be tailored by you to meet your individual business needs.
The course will:
Save you money in accountancy fees
Enable you to generate the information required for tax Self-Assessment
Give you the resources to comply with HMRC requirements when recording business income and expenditure
Show you how to implement time saving systems
Improve your financial controls and understand the week by week financial position your business
Improve your confidence and peace of mind when dealing with your business finance
If you would like to find out more about the course, the days that it is running, and book yourself a place, then head over to our Eventbrite page
Please remember, that fully funded places may be available for eligible women. To find out more about this please ring us on 0151 706 8111