Starting up a new business usually means being pulled in various directions and having to turn your hand to lots of new things. Here are our best tips for small businesses and sole traders in Ireland to get up to speed quickly with Bookkeeping.
1.Stay on top of your finances. It may sound simple but it is vital that you know where you stand and spot any issues as early as possible.
2. Separate your Business account from your personal accounts. Even if you are a sole trader, ensuring you keep your business finances separate will avoid things becoming messy very quickly. Set up a business bank account so that all your income and outgoings are in 1 place.
3. Go Digital. As soon as you can, move to cloud bookkeeping. Its secure and reliable, your data is backed up and won’t get lost and it will make your life a lot easier. You can access from all your devices even if you’re not in your office and upgrading from old school spreadsheets will mean you can reconcile your accounts with fewer discrepancies.
4. Reconcile, reconcile, reconcile. There’s no set rule but we would suggest doing this monthly as a minimum. That’s where you match your bank account transactions with the figures from your books from an opening date to a closing date. (Never “Today”, because things can still change!) Bank reconciliation statements will help you find any entries you may have doubled up on or forgotten to enter in your books and plays a huge role in ensuring you pay the right tax .
Once the bank statement and cashbook reconcile you file them away – there’s nothing further to do on those. Your next step would be to prepare a profit and loss report to see how the business is doing, if it’s making a loss you need to work out why.
5. Find an App designed for your level. There is little point in investing thousands in an advanced system with features beyond your requirements or understanding. Use a user-friendly bookkeeping app designed with you in mind, with help/support included. Whilst most apps cannot and will not offer tax advice, MMB app has built in explanations, demo videos and help icons
6. Plan Ahead for Taxes. Don’t miss deadlines. This can result in fines and no business can afford to throw away money. Its easy to panic at the mere mention of the phrase “tax deadline” but if you start early and keep up to date it will be much easier. Its sensible practice to always put away a percentage of your earnings every month to cover all eventualities.
7. Stay on top of your Cashflow. Invoice early, know who owes you what and when and if somebody is late paying you, even by a few days, make contact. Normally they will have simply forgotten, but if they are struggling it gives you an opportunity to structure a repayment plan and ensure you get paid.
8. Outsource if you need to. We are not all experts in everything and if you are too busy or unsure about what you’re doing, Mind My Business also offers a professional Bookkeeping Service on a temporary or permanent basis to alleviate that headache.