Keep on Top of Your Paperwork: Help for Small and Medium Sized Businesses

Keeping up with your paperwork can be tough when you are a busy small business. Book keeping probably isn’t your idea of fun but unfortunately it is just one of those things that needs to be done.

Of course when we talk about paperwork, we are referring to receipts, invoicing and anything else relating to accounting. There are many reasons why getting organised is essential when keeping up with your paperwork.

You can come across issues like fines if you are late getting important information to Her Majesty’s Revenues & Customs for instance. Keeping up with your paperwork will allow you to maintain a healthy cash flow within your business and help you plan ahead with your finances.

So now we have discussed why it is important to stay on top of your bookkeeping, we can now offer some handy tips on getting it done. However first of all you need to know what you should be keeping track of.

Accounting Advice

If you are self-employed as a sole trader or a partner in a business partnership, make sure to keep records of your business income and expenses for your tax return. Also keep records of your personal income and if you are the nominated partner in a partnership, you need to keep records for the partnership.

Methods of Accounting

  • Traditional Accounting: This is when businesses record income and expenses by the date they were invoiced or billed. When using traditional accounting, you’ll need to keep the standard records as well as further records to make sure your tax return includes what you’re owed but have not received yet, your year end bank balances, the value of stock and work in progress at the end of your accounting period, and what you have committed to spend but haven’t paid out yet. Finally, you must also include details of how much you've invested in the business in the year and how much money you have taken out for your own use.
  • Cash Basis Accounting: Businesses who use this method only record income or expenses when they receive money or pay a bill. This ensures that the business won’t have to pay Income Tax on money that they have not received in their accounting period. If you are a small business with an income of £81,000 or less, it is likely you can use cash basis reporting.
  • Records and Proof

    It is important to keep records of all business expenses, sales and income, and VAT records (if you’re registered for VAT). You should also keep PAY records if you are employing people, as well as records about your personal income.

    You should also keep proof, including receipts for goods and stock, statements and chequebook stubs, sales invoices, till rolls and bank slips. Business expenses also need to be recorded for your tax return and your records need to be accurate and clear enough to be read by HM Revenue and Customs.

    You can find plenty more information on these requirements and more on the official Government website. Now it is time to consider the best ways of keeping on top of your paperwork long term.

    Option #1 – Putting Time Aside

    Its best to avoid leaving your paperwork until the evenings as you could find yourself feeling quite tired from the day and more likely to make mistakes. Instead you could consider getting up early on a morning to do it. Just make sure that it becomes a regular habit.

    Option #2 – Using Online Accounting

    An online accounting package could help relieve some of the workload for you. It is possible to undergo a free trial with some packages so take advantage while the offer is there. That way you can figure out whether this system is right for you.

    Option #3 – Hiring a Book Keeper or Accountant

    You can actually save yourself time and money in the long term by hiring good professional help. It’s a good idea to get a recommendation if you can but if you can’t and find your accountant not being proactive enough, you can always try and find a new one.

    Hiring a bookkeeper is worth considering when it comes to keeping up with your paperwork. They will be able to get your books in order on a regular basis and maybe even reduce your accountancy bill.

    If you are struggling to find good book keepers, the Institute of Certified Book-Keepers may be able to help. You can find a list of qualified bookkeepers to get in touch with from there or ask other business owners for a recommendation.


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