Taking the pain out of accounting
From eliminating duplicate transactions and simplifying credit control to managing expense receipts and improving record keeping, there are a number of relatively easy steps you can take to get on top of your accounts.
The first ‘hack’ is to make sure you separate personal transactions from business transactions – mixing them together in a single bank account will inevitably lead to a long list of queries from your accountant.
Not keeping hold of documents to confirm the nature of expenses will significantly complicate the accounts production process as the better organised and documented the records of the transactions for the year are, the quicker and more easily these can be converted into a set of accounts.
Time equals money
Leaving your annual accounts to the last minute can be costly. If you can get your information in order and to your accountant before the end of year rush, you are likely to be able to get a better price for the work.
Cutting it fine puts everyone under pressure and by submitting information close to the deadline you are also giving your accountant the absolute minimum amount of time to spot potential issues or errors.
The devil in the detail
Another common issue accountants face is businesses not providing supporting documentation for transactions because they think that a bank statement is sufficient. This is often not the case since income may have costs deducted before payment of a net amount, which will only become apparent to the accountant when they get a look at the underlying documents.
You may assume that your accountant only requires information regarding payments made and receipts received during the period in question, whereas in fact they need details of all income and expenses due, regardless of whether these were paid or unpaid as at the year end.
Manage your assets
Many small businesses fail to maintain a fixed asset register, which makes it difficult to trace assets acquired throughout the year. This means potential eligible capital allowance claims could be missed, resulting in the business paying more tax than it needs to.
Failure to keep records of transactions (such as petty cash receipts) can also be costly since without records, input VAT that could have been claimed will be lost.
Staying on top of financial information and processing it in a timely manner rather than delaying the processing of invoices is another simple step you can take to make the accounting process run more smoothly. Regularly updating and reviewing financial information will prevent issues from arising further down the line as a result of your accountant dealing with out of date and/or incorrect information.
Focus on the process
Using a cloud-based accounting solution such as Big Red Cloud will make the account submission process much less stressful. You should strongly consider establishing a system like Big Red Cloud as it works for both you and your accountant.
Ask them how they would ideally like to receive your financial information and when – this makes their task of checking and submitting your accounts more efficient and therefore cheaper for you.