The Basics of Good Bookkeeping

When starting a new business, bookkeeping can seem like a daunting task but that’s where Kew Accounts here in Telford can help you.

We aim to put you in control of forecasts and make your business work for you. We offer advice on cash flow forecasts and ‘what if’ scenarios.

We can also offer advice on systems that can make your business run more smoothly and can often reduce accountancy bills.

Bookkeeping is simply the process of recording all the money that goes in and out of a business and it’s worth learning the basics.

Here are our top 5 bookkeeping tips:

• Keep records

You can do this in whatever way appeals to you the most, whether that is a spreadsheet suitable for a smaller business, an accounting book to keep track of simple records or bookkeeping software, which will make it easier to comply with the Governments Making Tax Digital project.  

Each time you make a purchase or receive a payment, you need to record this information. You should keep a copy of all your receipts for at least six years.

• Decide whether to do it yourself or hire someone to help.

You can hire a bookkeeper to record your financial transactions and keep things organised. 

You can also hire an accountant, who will help you with tax returns too.

If you decide to do it yourself, get into good habits from the start. Learn the basics and you can take full control of your business.

• Don’t leave bookkeeping until the last minute.

Bookkeeping is a good habit to get into but try to do it on time rather than at the last minute, when it’s easy to make mistakes.

Keep your records tidy and organised and store your receipts, either through software or somewhere where you can find them easily. Make sure you categorise them.

• Make sure you separate your business and personal records

Mixing your personal and business records will cause confusion and make it hard when you need to file your tax returns. 

A business expense could get lost in your personal account and you might miss out on a deduction. It makes life a lot easier if these are separated.

• Write a list of what you need to do

If you are new to bookkeeping, it is often helpful to write down a to-do list so you can keep track of what you need to get done and when. It will help you learn and prepare and it will soon become second nature.

In the meantime, we are on hand to help and can offer a variety of bookkeeping services.