By Pamela Phillips
As an ambitious business owner, you’ll want to work with an accountant who can show you how to make your business more efficient and profitable, so you can survive and even grow.
But to start, you need to understand how your business is doing right now. This means having access to numbers you can trust and which are available right when you need them, not a few months down the road.
Perhaps your business has grown and your bookkeeper is now overstretched, they are working hard just trying to catch-up. Maybe the accounting system you started out with is not right for you now your business has grown.
Here are 3 signs you need to review your bookkeeping processes:
- If you have ever been surprised by your numbers. Are your year-end accounts very different to the ones in your accounting system?
- When you’ve needed up-to-date records, for example, to apply for a loan or to get onto an approved supplier listing, you’ve had to wait for the bookkeeping to be brought up-to-date.
- You can’t quite get the view of your business that you are looking for. Perhaps you want to know, not just how much profit you have made, but how much profit a specific team in your business has made.
Why you need good bookkeeping practices in your business
Peace of Mind
One of the biggest benefits of setting up good bookkeeping processes is the peace of mind you get from knowing what your business can and cannot afford.
The stress of making difficult decisions is far reduced when you and your accountant have access to numbers you can trust, exactly when you need them.
If like many, you have been applying for a Bounceback Loan, or you’ve been making decisions about whether or not to furlough staff or make redundancies, you’ll know that having a good handle on your finances makes this a whole lot easier.
Make better decisions faster
You can better see what is coming so you can take action now to ensure your business doesn’t run out of cash.
When was the last time you reviewed your prices? If you had not been watching your numbers closely you may not have spotted that your profit margins have been eroded by increasing costs while your prices have remained unchanged.
Make the most of opportunities
You are also better placed to take advantage of opportunities as they arise. How nice would it be to be able to look at your numbers and be assured that you can take on that wonderful job candidate who will let you step away from some of the day-to-day work that has been taking up so much of your time?
Get paid faster
Good bookkeeping means raising sales invoices quickly and having checks in place to ensure any late payments are picked up and chased promptly. You’d be surprised at how many businesses we’ve met that don’t keep a close eye on their debtor balances so sometimes don’t even begin to chase late payments until they are months overdue.
So what does good bookkeeping look like?
Focus on what you really need to do and cut-out the rest. Do you really need to add a description to each line of the bill you are adding to your Xero account? Probably not! Do you need to be calculating prepayments and accruals each month for very small balances? Again, probably not.
Speaking to your accountant will help you get a view of what you do and don’t need to do to keep good records.
As tech-focused accountants, automation is core to what we do.
Here are some bookkeeping tasks you can automate to save yourself time and money:
- Connect your bank feed to Xero so you don’t need to manually upload bank statements
- Create bank rules for regular payments like wages and tax
- Where possible, set up repeating sales invoices so that these go out automatically
- Start using receiptbank to capture receipts and automatically create bills in Xero.
- Ensure receiptbank is optimised by using functions like fetch to automatically pull invoices directly from your suppliers
- Chase late customer payments automatically by connecting your Xero account with Chaser.
How can we work with you to deliver great bookkeeping?
We believe in daily bookkeeping with comprehensive balance sheet checks every month-end.
This way you know your records are up-to-date, you can plug your Xero account into the other systems you use to run your business, and any issues, such as overpayments to suppliers or forgetting to pay your PAYE to HMRC are picked up quickly.
At de Jong Phillips we help business owners just like you by taking on the responsibility of daily, monthly, and quarterly bookkeeping.
So what exactly does this mean? Let me talk you through how we can work with you to manage your bookkeeping process.
- Process the items in receiptbank so they appear in Xero
- Reconcile the bank
- Raise queries with you for missing information, for example where there have been payments out of the bank but there is no bill in receiptbank
- Use the receiptbank app to upload a photo of any receipts as you get them;
- Raise sales invoices as soon as you are able (don’t wait until the month-end to do this!);
- Send you a list of any outstanding queries we have from the daily bookkeeping
- Respond to our weekly queries
- Arrange payments for suppliers with bills due in the coming week, or if you want we can do this for you too.
- Reconcile all of the key balance sheet control accounts (PAYE, Net Wages, Pension payable, Fixed Assets) so that any issues are identified and addressed quickly. The types of issues we usually pick up are over or underpayment of wages, or missed PAYE or pension payments.
- Check the bank balance in Xero to the actual bank statement as occasionally this can get out of sync which means some payments or receipts don’t show up in your Xero account.
- Run depreciation so you have a true view of your profits during the year.
- Review trade debtors for old or unusual balances. Here we pick up debtors that need to be chased, and where client accounts may need to be put on hold. We also pick up overpayments from clients that need to be dealt with.
- Review trade creditors for old or unusual balances. Here we pick up where a supplier invoice hasn’t been paid but should have, or where a supplier has been over or underpaid
- Where needed, we included adjustments for prepayments, accruals, and deferred income.
- Process payroll (or approve payroll if we are running it for you)
- Pay wages and PAYE
- Answer any queries we have from our month-end review
- Reconcile your VAT account and review the transactions going through your VAT account to ensure that you are claiming the correct amount of VAT
- Prepare your VAT return ready to submit
- Review and approve/file your VAT return
Would you like us to help with your bookkeeping?
If you want to free up your own time and headspace to focus on your business and personal life, why not outsource your bookkeeping to us?
We can work as part of your team and, as we have a team of experts, you know it will be done right.
You’ll find there are cost savings too as we are often cheaper than hiring an in house bookkeeper with the additional advantage that we don’t take holiday or sick days!
If you are interested in finding out more, get in touch to find out how we can work together.