Small Business Bookkeeping

financialgraphics
Are you a small business and:

  • trying to run your business
  • develop your product or service
  • market your business
  • deal with the day-to-day bookkeeping

It isn’t always easy to do everything that needs to be done when you are running your own business, which is why it is a great idea to outsource the things that you aren’t very good at, so you can spend your time more wisely and focus on what you do best, which is sell your business! However, I know it isn’t always easy to just outsource everything, as there are costs when you do that, and if you are just starting out, the cash isn’t always available.

So what do you do if you can’t outsource? You have a couple of options – you could find someone who is trained and has experience in the field you want to outsource – let’s say bookkeeping in this case, and you can see if you can come to a mutual working agreement, where maybe instead of paying with cash, you trade services. This can work really well as long as both parties agree to terms beforehand and both parties feel they are getting a mutually benefitting deal.

Another option is to try and learn how to do some of the things you aren’t very good at, without spending a lot of money. So you could join a facebook group, or follow people on twitter, and read blogs that are published providing easy to follow tips. People who are experts in their field won’t always give away all of their secrets, but you can pick up some very good hints and tips on how to do the basics in things like marketing, publishing a website, handling the bookkeeping and accounts, and many other aspects that businesses need to be involved in.

At Ihelm Enterprises Limited, we offer bookkeeping and payroll for any sized business, and we are more than happy to speak with you and arrange an alternate type of payment, or even a payment plan. Our aim is to take away the stress and frustration of dealing with the day to day bookkeeping so that you can focus on your business and doing what you do best.  Why not contact us via the contact form on the website, our Facebook Page, or on Twitter (@ihelmenterprise) and see how we can help you with your small business bookkeeping.

Tips for Businesses on Keeping Good Records

Why is it important for a business to keep good records? There are many reasons to do this but here are the top three reasons I believe it is important:

  • HMRC Tax Inspections
  • easier to find information
  • less stressful at tax return time

When a new client approaches me and asks how I can help them with their bookkeeping and financial record keeping, I always ask them whether they have separate bank accounts, PayPal accounts, etc for their business. It makes it so much easier to know exactly what funds your business has if the bank account is separate to their personal accounts. It will also cut down on the queries that I may have, as I won’t continually be asking whether something is for personal or business use. If you do use your business account to buy something personal, please make a note of it, as again this cuts down on any queries. It is also a very good idea to file all of the bank statements in a binder, with a section for each different account.

Another top tip is to keep all of your receipts and invoices in a folder for each month. Separating them out by month, before you give them to your bookkeeper or accountant, means they will need to do less work as they won’t need to sort out the receipts. Here are a few time-saving tips for dealing with receipts and invoices:

  • If you have paid for something personally, write it on the top of the receipt – it’s a 5-second job and can save valuable time later on.
  • If you have bought a mixture of business and personal items at the same time, highlight either one and make a note on the receipt as to what the highlighted ones are.
  • Keep purchase invoices and sales invoices separate, and separate them out by paid and unpaid

The final tip, and I think this is probably the most important, is to get your processes set up and in place straight away. If you get into the habit of sorting out your accounts on a monthly basis, or even weekly, it will save a lot of frustration when it comes time to file your return. It will also save you money if you are using a bookkeeper or an accountant, as they will be working on your accounts throughout the year, instead of in one big chunk.

All of the above tips will help your business to run smoother, and help you be less stressed. They will make it easier for HMRC to find information if they do a tax inspection as everything will be in one place. Being able to find information quickly is very important when it comes to finances because the information can tell you so many things:

  • do you need to register for VAT
  • do you have the money to grow your business
  • who you owe money to
  • who owes you money
  • and many more

The financial information all being organised and in one place can also help to prepare your accounts ready for filing your tax return. If the records are all over the place and disorganised, it can cause you to use up valuable time, and money, in making sure everything is entered into the accounts.

Would you like to know how I can help you get your accounts in order and keep them that way? Contact me via the contact us page, or on Facebook or Twitter.

The Basics of Bookkeeping: Lesson 1

Bookkeeping, a word that instils fear and panic in thousands of small business owners. I am here to help allay some of that fear by helping you to understand the basics of bookkeeping.

The first thing that you need to understand is that proper bookkeeping is essential to every business and if you ever get to the point where you just aren’t able to devote the time to do it properly or are struggling to understand what needs to be done, you should find a qualified bookkeeper who can help you.

Bookkeeping is based on the double-entry system – money comes in, but it also goes out. Every transaction must have a two-sided entry. These two sides are known as Debit (DR) and Credit (CR). For each transaction, the DR side must equal the CR side. For example, if you buy a pencil for 10p, you have paid money out but have also gained a pencil.

DR Stationery 0.10p
CR Cash                              0.10p
purchase of a pencil

A very simple way to start keeping your records is to use a pen and paper and to use T-accounts. Set up each account (Cash, Stationery, Sales, etc) as a T-account with one side as the Debit side and one as the Credit Side.

taccountsexample1When you enter a transaction assign a number to it so that you can find both corresponding entries. You also need to make sure you date your entries.
taccountsexample2

Here is an example of how to record a sale. You make a sale of £5.00:
taccountsexample3

All of your T-accounts now look like this:
taccountsexample4

At the end of each month, total up each T-account. The total DRs should equal the total CRs.
taccountsexample5

Total DRs = £5.10p
Total CRs =                         £5.10p

Using T-accounts is a very simple way to keep track of your accounts.

Lesson 2 will look at the different types of accounts: Assets, Expenses, etc.

If you have any questions on today’s lesson, or would like help answering other bookkeeping questions, please leave a comment below or contact us via the Contact Us Page, our Facebook Page, or on Twitter.

Shh…A Bookkeeper’s Secret

When people ask me what I do for a living, the majority of people give me a look of sympathy and some even get a look of disgust on their face. I’m going to tell you a secret though….I LOVE BOOKKEEPING!!

I have always had an affinity for numbers right from a young age. In high school, I loved algebra and calculus. I didn’t enjoy geometry or statistics quite as much, but give me complicated equations to work out and I was a happy girl. I think my interest in bookkeeping actually started when one of my older sisters took an accounting course in high school and I watched her do some of her homework. I took that course myself and I was hooked. It was my first proper introduction to the world of bookkeeping and I learned about the very basics that I talked about in The Basics of Bookkeeping: Lesson 1.

I didn’t actually take any further accounting courses until my second year of university. I then moved to the local college and excelled at all of the courses I needed to take. I graduated with a Business Administration Accounting degree- I was qualified to do bookkeeping.

Strangely though I didn’t do any bookkeeping until I moved to the UK in 2003, when I did a home learning course to brush up on my skills.

Bookkeeping is all about numbers and numbers can tell a story. When all of the receipts, invoices and all of the other financial information is entered into a set of accounts properly, you get a story about your business. Just like an author, a bookkeeper writes story, but in numbers

So there is my secret – I LOVE NUMBERS & BOOKKEEPING. I am doing exactly what I love.

If you would like to know how I can help you tell your business story, contact me via the Contact Us Page, our Facebook Page, or on Twitter.