I’m sure you have all heard the saying ‘Time is money’. If you are paying for a service to be completed, you don’t then want to be surprised with an additional bill when it has taken longer than expected. In these uncertain times with rising energy and other costs it is unnecessary to pay more than you need. Recently, I have had occasion to help some clients tidy up some bookkeeping and I realised that there are a number of small things that could have been done to avoid the problems in the first place.

Not everyone is a bookkeeper, but it is useful to know a few things about bookkeeping so that you can make sure that everything is running smoothly.

Up to date

Make sure your bookkeeping is done regularly and is always up to date. Most businesses do their bookkeeping monthly or quarterly. If the bookkeeping is kept up to date it is easier to remember what payments and receipts are for if your accountant asks. There is also less pressure to get the work completed at the year end.

If the bookkeeping is up to date, you can obtain figures quickly and easily if you need them. When clients need accounts for the bank, for example when they take out a mortgage or a loan, we will have the figures to hand which makes the whole process much less stressful. Losing out on your dream house because you don’t have your figures to hand is easily avoidable. Furthermore, in order to give you advice on how to save £££’s in tax we need to be able to analyse your figures in real time.

Bank Feeds

The accounting packages have bank feeds which although save a lot of time, can occasionally have glitches. Ask your bookkeeper to check that the balance on your monthly statement from the bank agrees with the balance on the same date on the accounting package you use e.g. Xero. If there is an error, it is much easier to find it if it is recent. It can sometimes take a couple of hours to find errors especially if there are lots of transactions which can be costly and time efficient.

Reconciliation

It is important to make sure payments are allocated to the right expense and receipts to the right income source. Part of completing the year end accounts is to analyse the expenditure and income to provide information on improving your business. Incorrect allocation can give incorrect figures for analysis. If the bookkeeping isn’t done regularly, you may not remember what transactions occurred.

Match the invoices

Some businesses use the invoicing facility on Xero. This helps keep track of what money you owe to suppliers. If invoices are not matched correctly to the payment, what you owe will be incorrect.

Other information

Please let your bookkeeper know if you have taken out loans, hire purchase agreements or made some large purchase. The figures are needed in Xero to match with payments. Some of these payments can be claimed for tax purposes and no one wants to pay more tax than is necessary.

Always ask if things don’t look right

You may not be a bookkeeper but if your figures don’t look right for any reason, please ask. It is better for us to explain it all rather than get yourself into difficulties.