How do I keep my accounts in order?
As a business owner you surely have a very busy life and accountancy may not always be front of mind. But your accounts are crucial to your business. Here are some tips to help you manage your business accounts painlessly.
What is accounting and why is it important?
According to the Cambridge Dictionary, accounting is “the skill or activity of keeping records of the money a person or organisation earns and spends”.
When you strip out all the jargon it simply means keeping information tidy. Much the same way as your contacts are organised in your phone, you can use apps and software to help you to do the same with your accounts.
Accounting is important to provide good quality financial information to:
Run your business better.
Know how much money you have available to reinvest in your business, or to take out for yourself.
Pay the right amount of tax.
How to manage accounting for a small business
Keeping your business finances organised starts with separating your transactions. When everything runs through a dedicated business account, tracking income and expenses becomes much simpler.
With Starling Accounting, you can manage your banking, bookkeeping and tax in one place. Built into your Starling business account, it helps you stay on top of your records without switching between multiple tools.
As your business grows, you may prefer to connect to cloud accounting software such as Xero or QuickBooks. Starling offers real-time integrations with these providers through the Starling Business Marketplace.
Modern accounting software reduces manual admin. Features like optical character recognition can capture invoice and receipt details, helping you maintain accurate digital records and store supporting documents in case HMRC needs them.
Online tools also make invoicing easier. Raising invoices promptly not only keeps your records up to date, it’s the first step to getting paid.
Pain free accounting tip for small business owners
The best way to keep your accounts in order is the little and often approach. Bookkeeping doesn’t need to be onerous but it must be done frequently. Like cleaning your teeth every day; it’s painless and avoids bigger problems later. Doing your own bookkeeping can help you to understand your business more fully and is a learning process. As you become familiar with your numbers, you will soon see whether business is performing better than usual, or if you need to take some action because you have spotted a dip.
It’s a good idea to talk to an accountant about the best way to do your bookkeeping to minimise time and cost. They should be able to help you choose the best method for you and your business, so that you feel comfortable and in control as well as making best use of your time.
Article updated: 13th October 2022