How to keep your company accounts
There are many different ways to record the money coming into and leaving your business. You need to choose one that you feel comfortable with, that suits the number of people you have working for you and the number of transactions per month.
On paper: The simplest way is to use an accounts book that is ruled to help you record the date, details and amount of each transaction.
Spreadsheets: You can use simple formulae in a spreadsheet to work out totals and percentages and keep your records up to date. One disadvantage of a spreadsheet is that there is no double-checking - if you don't spot a mistake you might never correct it.
Accounting software: The benefits of specialist accounting software are that:
- You usually only have to enter information once
- You can automatically generate invoices, remittances and reminders - and you can usually customise these with your logo
- You can ask for different types of report and alerts to keep you informed about cash flow - who you owe and who owes you
- It works out your VAT for you
- It can grow as your business grows
- You can make better forecasts and plans to take to your bank manager or investor
- If you employ staff you can calculate pay and produce pay slips
Although the package should come with a manual, it is a good idea to get a short session of hands-on training. You need to set up the system in a way that helps you get the best out of it. Ask your accountant for help or see if the company that produces the software has an online e-learning resource that you can work through.
It's a good idea to have another person on the end of the telephone - an accountant or software specialist - who knows what to do if things go wrong. Think how you will back up all the information you have keyed in, so that you are not left struggling when a tax deadline looms up.
To find a chartered accountant in your area, go to:
Institute of Chartered Accountants in England and Wales
Institute of Chartered Accountants of Scotland
Institute of Chartered Accountants in Ireland
