Mistakes small businesses and the self-employed should avoid
Even though it’s important to make sure your financial records are accurate, it’s not often the most exciting part of working for yourself so here are some mistakes small businesses and the self-employed should avoid.
It’s easy to focus on the more enjoyable aspects of running your business, but pushing bookkeeping to the back of your mind – and letting the documents pile up – really can cause you issues down the line.
- Leaving it until the last minute
Putting bookkeeping off is one of the biggest – and easiest – mistakes you can make.
We all have those tasks we need to do but leave until tomorrow, then the next day and the next. With bookkeeping the workload piles up and it can quickly get to the point where you don’t have the time or energy to catch up.
If you have somebody else (like the Hollies!) to does your books, spend some time each week getting your records and receipts organised to make life easier for yourself and them.
- Mixing business spending with personal spending
While those starting out might find it easier to mix personal and business spending, it costs time and money in the long run.
It’s worse if you ask a bookkeeper or accountant to do this for you, because you’re paying for their time.
When it comes to your tax return, keeping your transactions separate helps to minimise errors.
3. Paying for somebody’s time unnecessarily
You want your accountant to use their time well and keeping your books up-to-date and in good shape frees them to spend time on what they do best.
They have more time to give you advice, which should help you run your business effectively.
If you haven’t got an accountant but are thinking about hiring one, do your research and go with one that’s got a good reputation. A good accountant, while expensive, can be worth it in the long run.
- Failing to keep good records
Whether it’s bad filing or not keeping hold of your receipts, if you don’t have a system for keeping track of your expenses and cash flow, you won’t have your eye on the health of your business.
Keeping good records will help you account for everything and avoid any disputes.
- Paying in cash
A good start when it comes to keeping good records is making sure you pay using your card or electronic transfer. This is because your bank records the date, amount and the recipient’s name – saving you time from entering this information into a spreadsheet.
Of course, a good bookkeeper can help you with all this! If you want some advice and a no obligation chat about how we can help you, give The Hollies Bookkeeping a call on 01743 790086.