With less than a month to go until the end of the financial year, are you ready to close off your books ready to submit your tax return? At Virtual Angels, we like to get our tax returns submitted and out of the way as soon as we can. That way we know exactly how much we’re saving for and there’s no mad dash come 31 January.
If you’re fed up with being frazzled in January, here’s a few tips for keeping on top of your books.
Even if you’re self employed and don’t need a business bank account, open a separate current account for your business transactions. This keeps personal and business transactions separate and makes them easier to reconcile for your accounts.
Keep Your Records Up to Date
Whether you’re using a spreadsheet or an accounts package try to schedule in a small amount of time every week to update your accounts and reconcile them against your bank account.
If you use a spreadsheet you can add tabs to track your drawdowns, customer payments, mileage and other relevant expenses which will be used in the calculation of your tax return.
If you’re using an accounts package, and there are some great options out there, it should track your drawdowns but you may want to keep a separate spreadsheet to record other income and mileage.
When you record your business transactions remember to note what it was for. If you’re out and about and have a receipt you can jot it on the top of that, so you don’t forget before you get home. Again, there are some great accounts packages out there which have apps that allow you to photograph and record your expenses on the move!
File Your Receipts
Whether it’s an envelope per year (or month) kept in a shoe box, an electronic file area on your computer or a filing cabinet, try to file your receipts as soon as you’ve logged the transaction in your accounts. If you decide to schedule in a weekly session to catch up on your books, you can use some of this time to file your receipts.
Henry Ford once said “Nothing is particularly hard if you divide it into small jobs” – if your tax return is normally a scary monster staring you in the face on 31 January – why not make a new financial year resolution to do a little bit of your bookkeeping every week so it’s a more manageable task.