Bookkeeping Basics for Your New Small Business
You’ve finally got your business venture up and running. That’s great. It takes a great deal of time and effort to launch a new business. However, now that you’re trading it’s important to start keeping track of your income and expenses.
Accurate bookkeeping is the cornerstone of a successful business. Without up to date records, you will struggle to file your statutory financial statements to HMRC. You will also find it hard to manage your business effectively.
Staying on top of the bookkeeping basics is half of the battle. In this post, we will list some of the daily, weekly, and monthly bookkeeping tasks every small business owner should be carrying out to maintain healthy financial records.
Daily bookkeeping tasks
Be aware of any outgoing or incoming payments: Are any payments leaving your business account today? Are you expecting to receive any payments? If so, what’s the total?
Know how much cash you have available: Does your business have enough available cash to cover outgoing payments?
Weekly bookkeeping tasks
Prepare and send invoices: As tempting as it might be, don’t leave this task until the end of the month. You may forget items or fail to bill clients entirely. Always keep a hard copy of any invoices you send.
Record receipts: Organise and file receipts for any cash payments you have made.
Record transactions: Every single transaction should be recorded. This includes both incoming and outgoing payments. Examples include payments to HMRC, wages, and payments from customers.
Pay suppliers: Avoid late payment penalties by reviewing payment deadlines and ensuring suppliers are paid on time.
Review forecasted cash flow: How steady is your business’s cash flow? Will you be able to meet your financial obligations for the rest of this week and the coming months?
Monthly bookkeeping tasks
Review payroll: If you employ staff, it’s very important to keep track of payroll and calculate employee payments and any deductions. Payroll software can make this task much easier. You will then need to make the relevant payments to HMRC.
Chase late payments: How many payments are overdue? Keep track of all late payment details and record your attempts to chase them.
Review bank statements: Check for any banking mistakes or evidence of fraud. Have you paid any direct debits twice, or received less from a client than you were supposed to?
Check outgoing payments: Have all the payments that should have left your business account actually gone out?
Review profit and loss: How does your profit and loss report compare with your forecasted growth? Are you overspending? How are you doing compared with the previous weeks and months? Spotting negative trends early can help you make the necessary changes to bring your cash flow back under control.
Do you struggle with your small business bookkeeping?
Some small business owners choose to do their own bookkeeping when they are starting out to save money. However, this isn’t always the most time or cost effective solution.
Hiring an experienced accounting team could help to free up more of your time to focus on your business. You will also be entirely sure that you are meeting all your legal obligations and be confident that you aren’t missing out on any tax deductions due to lack of knowledge.
Bookkeeping services from UWM
If you need help with your bookkeeping, get in touch with UWM. We’ve been helping UK businesses improve cash flow for over 30 years. For more information about our bookkeeping services, get in touch today. Call 0113 231 0202 or send your enquiry online.