Give your accounts a spring clean
As the days get lighter and warmer (we hope!) and the new tax year begins, it’s time to shake out the duster and polish and give your accounts a spring clean.
So here are a few useful tips on how you can get your accounts looking fresher and tidier than ever for the year ahead.
1) Get your records up to date
You need to build your business on firm foundations, so start by making sure your books are up to date. This way, you’ll have useful information to work with, such as whether you’re charging your customers enough to make a profit.
Sort out and file your paperwork as well, whether you do this using hard or soft copies. If you store any information on a computer, make sure that you sort these files thoroughly and make back-up copies of the data - as this will give you extra security in case you lose any papers and have to justify your figures to HMRC.
And, for the new tax year, try and keep your books up to date as you go along. It will make your life much easier. Honest.
2) Chase up slow-paying customers
Once your books are done, you’ll be able to see which customers pay you quickly and who pays you slowly - or, in same cases, who doesn’t pay you at all.
Ask yourself whether you could be paid any quicker? Is it time to tighten your payment terms, or perhaps take payment up front or by credit card? Do you need to take steps to implement tighter credit controls for your business, or use a system that automatically chases payments for you?
If there are certain customers who always pay you slowly, is it time to stop working for them - or should you be firmer with them when it comes to agreeing a payment date?
By staying on top of your accounts, you’ll have access to information that could have a huge impact on the way you manage your business - and your customers - in the future.
3) Check your costs
Go through your bills and see how much you’re paying to your suppliers.
Have any of them put their prices up? If so, should you put yours up to compensate for this?
Could you save on costs by, for example, working at home instead of renting an office?
It’s important to also spend enough on areas such as your website and marketing. You can be smart and avoid paying over-the-top prices, but if you cut corners here it’ll be obvious to your customers - and could send the wrong message about your business and your brand. For example, what does a business card printed on flimsy cardboard and cut by hand on a guillotine say to you? How well do you think that business looks after its customers?
Make sure you’re spending wisely on your business but don’t bust your budget!
4) Check your tax
One important cost that no business can escape altogether, unless it never makes a profit, is tax!
However, by getting your books up to date now, you’ll be ready to have a conversation with your accountant about how you might be able to save tax - and about what actions you can start implementing in order to do so.
Make sure you’re up to speed with your tax and it could have a very positive effect on your business.
5) Tidy up errors in your books
We’ve all got them – those lingering little errors in the records. Maybe it’s that credit note your supplier sent you which you recorded as £100 rather than £150, or that £20 train ticket which you paid for yourself rather than from your business account.
By giving your accounts a thorough spring clean, you can ensure that your business is set fair to make the very best of the new tax year.
- Giving small businesses a boost with Royal Bank of Scotland and NatWest
- Less than 2 weeks to go! Here’s how to avoid Self AsSTRESSment
- New Year, new plan: how automating tasks can make 2017 your most successful year yet
- Five things we’ve learned about the UK’s smallest businesses in 2016
- FreeAgent Mobile: don't sweat your business health