Hands up we’ve all been there. Possibly even recently **coughs** when the VAT return was due and we were perhaps a little (a lot) behind with our reconciling… and had to do some binge bookkeeping to get it all done in time.
It can be easy to fall behind on the admin side of business, as selling and doing always seems more appealing–we get it. Bookkeeping might not be only task you leave to the last minute and do in a hurry when it becomes urgent… but it’s definitely one that can cost you.
The quickest way to solve binge bookkeeping
The quickest way to solve the problem of binge bookkeeping is, of course, to hire a bookkeeper. A good bookkeeper will keep on top of all your invoicing, reconciling, expenses and filing of your VAT return without you having to even think about it.
But if you’re doing your own bookkeeping, here’s a plan and some pointers. And yes, we’re going to stick to this plan now too to make sure it doesn’t pile up!
Our plan to prevent binge bookkeeping
- Use online accounting software that’s easy to update from wherever you are, so there’s no need to wait to do accounting until you’re back in the office. We’re big Xero fans, but there are lots of other online accounting software options to choose from–Quickbooks, FreeAgent, etc.
- Automate as much as you can:
- Have your bank feeds go into your accounting software automatically so you don’t have to sit there with a paper statement uploading, line by line, what’s been coming in and going out.
- Have your payment processing go straight into your accounting software too. We love Stripe and GoCardless, but you can do this with PayPal and other payment providers. You don’t have to enter all this information as it automatically appears in your accounts.
- Add receipts and expenses as they happen. We use Receipt Bank and a Curve Card to make sure all our buying gets recorded without us having to remember what we’ve spent. Receipt Bank uploads all our email receipts so we have a copy AND it’s entered in our Xero. And whatever we buy using our Curve Card we take a photo of the receipt and that goes into our Xero, too.
- Invoice quickly–or, even better, have a proposal or quote system that allows you to include order forms for prospects to accept your offer right away, pay online and have this all linked to your accounts software. This means you don’t even have to raise an invoice, prospects can simply pay you by card or a direct debit from the proposal or quote and the bookkeeping is taken care of. Not very subtle plug for Connectably here as we’ve made this one of the things you can do easily.
- Reconcile regularly. Depending how many ‘transactions’ you have, it might be something you want to do daily, weekly or at the very least monthly. The good news is that, if you are using smart accounting software, it ‘learns’ and ‘matches’ your transactions. Xero starts to know how you code your expenses, so it learns your out-of-the-office eating habits and coffee shop preferences (!) and will suggest matches for you to simply tick. It does the same for invoices–matching names and amounts so you’re simply faced with a list of ‘ticks’ to run through with maybe the odd one here and there that’s not quite right, saving lots of time.
The benefits of keeping your bookkeeping up to date:
- You know your ‘current cash position’. It’s great to know where all your money is in your business from day to day and not have to guess. Am sure we’re not telling you anything you don’t know already, but if you’ve not tallied up all your expenses and matched up your money coming in, it’s hard to see what’s still owing and what you’ve spent. If you can’t see where you are, it’s hard to make decisions and go faster. Good or bad, visibility of your numbers allows you to run your business better.
- If you’re working against a budget or cash flow forecast, up-to-date bookkeeping means you’re able to compare planned vs. actual accurately and quickly, and take action accordingly.
- Your VAT is up to date so you can look ahead to your quarterly payment and not have a surprise–usually not in a good way!–of how much it’s going to be. If you’re up to date with your bookkeeping, your VAT can be worked out as you go along.
- You can follow up outstanding payments quickly as you’ll actually know who hasn’t paid!
- You can curb spending quickly if it’s getting out of hand **step away from the lattes**
- You can schedule work, manage your team and work with confidence on the projects and clients who have paid.
Our bookkeeping resolution…
Our recent bookkeeping binge isn’t something we’ll be making a habit of, and we’re keeping it a one off event.
From now on, we’re staying on top of our bookkeeping as we like the buzz of reconciling our Xero every day and seeing our Receipt Bank rules saving us work the next time we buy from the same place. And as we have all the tools to make it easy to keep up to date, we’ll only have ourselves to blame if it doesn’t happen!