If You are a small business owner, bookkeeping is something you probably must deal with on a regular basis. Here are 5 Tips to make bookkeeping simple for your business.
Bookkeeping, in general terms, keeping records of the financial affairs of a business “what is your income and what is your expenses”.
You must keep record of all transaction in and out of the company (bank statements, receipts, invoices etc. So that when you process your companies tax return you can pay the correct tax amount QuickBooks, Free Agent or even on Excel, but we would recommend Sage Pastel or something similar right from the start. This will save you an enormous amount of time and money when your business grows to the point where you do not have another choice.
If you are still in the forming stages of your company, there is a very simple way to keep records. Doing it on Excel so that it will make life much easier in the future to process all your transactions.
ALL YOU NEED TO DO?
You simply add all your income and expenses on to your spreadsheet or accounting software.
If you use our income and expenses spreadsheet. You can see which information you need to enter and where.
The basic info you will need to include for both income and expenses is:
- Date of invoice/bill
- Date of payment
- Name of your client/the name of the person or company you paid
- Description of service or product
- Amount received or paid
Remember to also keep copies as proof of all:
transactions
invoices
receipts
travel logs
bills
bank/credit card statements
For both your income and your expenses.
You can keep physical copies of them in a file and save them if you ever need to refer to them.
UPDATE YOUR BOOKKEEPING RECORDS OFTEN.
It’s so important to update your bookkeeping records (or “books”) on a regular basis, to avoid falling behind and having to spend ages getting up to speed.
Decide whether you’d prefer to update your books frequently for short periods of time. Or if you’d prefer to set aside a bigger chunk of time less often to do this.
Most of our clients update their books on a monthly basis, when they receive their bank statement, as they can simply add all the transactions from their bank statement to their spreadsheet. Make sure to have evidence of each one and file their bank statements and receipts etc. at the same time.
Updating your books weekly also works well, as it means that there’s less of a build-up of transactions and receipts to deal with.
Remember record keeping is not just a great way to manage your business, by law SARS requires micro businesses to keep records for turnover tax, see link below.