Bookkeeping 101: Everything you need to know
The word bookkeeping is enough to strike fear into the hearts of potential business owners. We have all heard the stories from our sole trader friends or family-run business owners about how it is the most tedious and annoying part of running a business. They’re probably right, but only because they’re doing it wrong.
Don’t misunderstand us. Experienced business owners will know that accurate bookkeeping is a necessary part of running a successful company, and their advice can be useful when starting your own. But, don’t be surprised if the advice you get from Sam the sole trader largely rests on their experience of sitting down at their dinner table with a pen and paper while crying under a mountain of receipts.
If they were doing it the modern way, it’s likely they would have a much better time because it’s actually straightforward. If you’re starting or running a larger business, you certainly cannot rely on old methods. It is completely unfeasible. So, read on and take our advice to make sure your bookkeeping is efficient, stress-free, and inexpensive.
What are the main points to bookkeeping?
Simply put, there are four main points to bookkeeping:
- Raising sales invoices and listing them
- Recording the money coming in
- Tracking purchase invoices and bills
- Recording payments that you make
It really is that simple.
Improve your bookkeeping
The best time to set up a system is at the beginning of your business. The second best time is right now. You need to make the changes to your bookkeeping system as soon as possible, so you can start feeling the benefits of a well-organised system immediately.
The benefits of better bookkeeping
- You always know what your financial situation is. There are no nasty surprises when the taxman comes knocking.
- You’ll make better decisions – perhaps spending thousands on an office makeover isn’t the best decision if your cash flow isn’t stable.
- It will save you time in the long run – you no longer have to spend stressful days at the end of the month trying to catch up.
- Helps identify fraudulent charges, stops cheques bouncing, and makes sure you have enough money to keep business as usual.
- Makes problem-solving easier – Catch any problems as they arise and solve them rather than waiting to find them at the end of the month after they’ve had a chance to worsen.
The next steps
We are sorry (not sorry) to tell you that if your situation is a mess, chances are your business is a mess, or soon will be. Are you having cash flow difficulties? Sort this out now by taking control and creating a bookkeeping system. Excel just won’t cut it anymore. You need to invest in some professional bookkeeping software, and this doesn’t have to be expensive. You’ll be able to sit back and relax while the software does most of the heavy lifting and even carries out automatic updates to your accounts. Doing it daily has never been easier.
An even better solution is to hire the professionals to take control of it for you. Then, you won’t have to learn how to use the software designed for accountants, but you’ll still feel all the benefits. You won’t even have to think of bookkeeping anymore. All your thoughts can now go towards activities that will make you money and better your business, and your business will thank you for it.
Why not give big Hand a try? We can take control of your bookkeeping, so you have a lot less to worry about. Become a more efficient and profitable business with Big Hand today by getting in touch with us on 0161 327 2911.