The 7 Bookkeeping Mistakes small businesses and the self Employed should avoid

1. The 7 Bookkeeping Mistakes The 7 Bookkeeping Mistakes small businesses and the self E businesses and the self Employe a avoid Good bookkeeping and accurate records are critical to ensuring that your business is in the best possible shape. So, take a look at our complete list of mistakes to avoid below and see if there's anything you can do better. small should mployed d should void Our accounting and bookkeeping services are available to everyone - whether they are individuals, startups, landlords, or business owners - who is concerned about their financial affairs, such as accounting, bookkeeping, taxes, yearly reports, VAT, payroll, and so on. Getting in touch with our best accountants in Brixton at Accounting Firms will help you achieve your business objectives in a short period of time. 1. Postponing it until the last possible moment 1. Postponing it until the last possible moment Putting off bookkeeping is one of the biggest – and most common – mistakes you can make. We all have tasks that we need to complete but put off until tomorrow, then the next day, and so on. However, with bookkeeping, the workload quickly accumulates to the point where you don't have the time or energy to catch up.

2. Even if you only spend a few minutes each day on your books, you'll stay on top of things and gain a better understanding of your day-to-day accounts. This allows you to identify potential issues (such as consistently late payers) early on. It also assists you in meeting your financial deadlines. If you outsource your bookkeeping, spend some time each week organising your records and receipts to make their job easier. 2. Combining business and personal spending 2. Combining business and personal spending While it may be easier for those just starting out to mix personal and business spending, it costs time and money in the long run. This is due to the fact that you must sift through the account to locate your business transactions. It's even worse if you hire a bookkeeper or accountant to do it for you because you'll be paying for their time. Keeping your transactions separate helps to reduce errors on your tax return. With all of the correct income and expenses recorded in your accounting, you should end up paying the correct amount of tax. 3. Unnecessarily paying for someone's time 3. Unnecessarily paying for someone's time You want your accountant to make the best use of their time, and keeping your books up to date and in good shape allows them to focus on what they do best. They have more time to provide you with advice, which should assist you in running your business more effectively. If you don't have an accountant and are considering hiring one, do your research and choose one with a good reputation. A good accountant can be costly, but it can be worthwhile in the long run. Expect to pay £200 for an accountant to assist you in filling out your tax return, but their knowledge of tax and what expenses you can claim could help you reduce your overall tax liability. They can also advise you on how to keep records and help you set up a good bookkeeping system. 4. Failure to maintain accurate records 4. Failure to maintain accurate records Whether it's poor filing or failing to keep receipts, if you don't have a system for tracking your expenses and cash flow, you won't be able to keep an eye on the health of your business. You should keep and record receipts for even the

3. most insignificant purchases, such as the coffee you buy clients at a last- minute meeting. If you're claiming business expenses to reduce your tax liability, HMRC may request proof of your receipts. Keeping accurate records will allow you to account for everything and avoid disputes. Furthermore, you should be recording and numbering your invoices, as well as ensuring that they are all in sequential order. Maintain a bill-paying system to ensure that you pay your bills on time. Many people now prefer to use software that is hosted in the cloud. Such software can scan receipts, input information about your cash flow, and even generate invoices – a comparison of some of the most popular apps can be found here. Software is also a great way to back up your records. 5. Cash pay 5. Cash payment Making sure you pay with your credit card or electronic transfer is a good place to start when it comes to keeping good records. This is because your bank keeps track of the date, amount, and recipient's name, saving you time from having to enter this information into a spreadsheet. ment 6. Making it simple to become distracted 6. Making it simple to become distracted While bookkeeping may appear to be a distraction from your day-to-day work, it is not something that can be done while distracted. This is especially true if you work from home, where family or flatmates can easily distract you from your work. Make a time to work on your books, preferably in a room where you know you won't be distracted. It should help you complete your work more quickly and with fewer errors along the way. 7. F 7. Failure to reconcile your accounts on a monthly basis ailure to reconcile your accounts on a monthly basis If you don't do this once a month, it will cause you problems in the future. It is critical to reconcile your accounting system with your financial accounts, ensuring that your own record of income and expenditure matches up with your financial statements. If you don't do this at least once a month, it will be more difficult to account for any inconsistencies or flaws in your process. Doing so on a regular basis

4. allows you to see how your business is doing and, if necessary, make improvements. In addition, we have an accounting firms directory website where you may post your accounting-related business information.