Improve your business in an hour a week
Here at FreeAgent, we’re always looking for ways to make your bookkeeping less of a burden. We reckon that if you dedicate just one hour a week to your business finances, you’ll not just save time on the admin work, but will suddenly have a chance to work through all those bigger-picture financial questions, like “how profitable is that client?”, or “how do I plan for seasonal business?”
The first step is to pick an hour that you can dedicate to your books, then draw up a plan of action so you can turn doing your books into a regular routine. Here’s a checklist of the things that I recommend every business should do every week:
Your hour a week checklist:
Keep up to date with your invoices
Invoices might be the key to getting paid, but it’s still amazing how many clients I’ve had who were too busy to send their invoices! Scheduling time to invoice every week is a great way to keep your cash flow healthy and teach your customers to pay promptly.
How FreeAgent can help: make use of FreeAgent’s automatic invoice email feature to make sending invoices easier, and even set up recurring invoice profiles that let you invoice the same customers for the same amount every month. To save time chasing money, set up automatic invoice reminder emails that remind customers about overdue invoices.
Manage your bills
Keep track of the costs you’re incurring and pay your bills promptly to keep good relationships with your suppliers and stay on top of your cash flow. As part of your hour, set aside some time to go into your online banking site and pay any bills that are due for payment.
How FreeAgent can help: If your suppliers give you credit, record your bills in FreeAgent and that way you will have views on both the overview and contacts screens to show what you owe and when.
Reconcile your bank transactions
Do you know what you spent your money on in the last week? The last month? Which customers haven’t paid you yet?
If you don’t keep track of your bank accounts, you will forget what you bought, and when your accountant asks you ten months later as she goes through your bank statements, you don’t stand a snowball’s chance in the Olympic flame of remembering what each cost was for. Use part of your hour a week to stay on top of your bank transactions to save yourself a last-minute scramble.
How FreeAgent can help: You can import your bank statement directly into FreeAgent, then just “explain” each transaction. FreeAgent can even automatically import transactions from your PayPal account and some UK bank accounts.
Check your projects are earning you enough
Quick: which of your projects is your most profitable? What’s your best earner, even after all those taxi fares and special delivery postage costs? It can be hard to know if you haven’t recorded all of your costs!
Use part of your hour a week to tie costs back to any projects that you’re running to make sure that you have a true view of how much profit you’re making on each project. Once you have the full picture, you can make even smarter decisions about where to spend your time.
How FreeAgent can help: Once you’ve updated your transactions, you can use the project profitability area in FreeAgent to spot your most profitable projects. If you aren’t making enough profit, you can use these reports to say “No more Mr Nice Guy” and re-visit your pricing!
Learn one new thing about your business
What secrets is your business hiding from you? Once you’ve got all the admin out of the way, you can use part of your hour to turn detective and learn to read what’s hidden inside your accounts.
As a start, take a look at your profit and loss account for the last few months. Don’t panic, this really is just a sum of what your business earnt and what its day-to-day running costs were. Did your income drop at a certain point in the year? Could you smooth this out by broadening your product range, or by invoicing your customers monthly instead of annually?
How FreeAgent can help: Dive into the accounting section of FreeAgent to start exploring your profit and loss account and other reports.
Have you got two minutes to make things even easier? Here are two things that you can do every day to make your hour a week even simpler:
Record expenses as you go
How many receipts do you have in your wallet right now, waiting to be forgotten or lost? If you’ve got a smartphone, record that expense as soon as you spend the money, before you can forget about it.
How FreeAgent can help: FreeAgent is mobile-friendly, so you can just take a quick snap of your receipt on your smartphone, upload it to your FreeAgent expense entry, then throw it away, safe in the knowledge that the cost will show the next time you log in. And yes, HMRC will accept the scanned receipt as proof of the expense! Just make sure to take a picture of both sides if there’s any information on the back. For more help with receipts, we also integrate with Receipt Bank.
Track your time, even if it’s not billable
When’s the best time to track your time? As soon as you do the work, when the details are fresh in your mind! As soon as you finish a task, just take two minutes to record it, whether it’s billable time or not. Tracking unbillable time will give you a full picture of your profitability, and will help you make good decisions about where to spend your time.
How FreeAgent can help: You can track your time on the go with FreeAgent’s mobile app for iOS and Android, on FreeAgent at your computer, or you can even use an integrated time tracker like Eon to automatically send timesheet data to FreeAgent.
I like an hour a week because it’s a small habit that can make a big difference for your business - the regular routine will help you stay on top of the boring stuff, but also gives you time to think about your big-picture goals for your business, and how to achieve them. Small habits really can have big results!
- Video: self-employed business expenses by HMRC
- Finance Bill 2017-19: Making Tax Digital back on the agenda
- A little goes a long way: pension prep for freelancers
- 4 ways to keep your business ticking over while you travel
- Business on the beach: five holiday reads for freelancers