If you are starting up a business, doing your own book keeping is a good idea. Many enterprise startup support programmes advocate this for good reason. Not only will it save you money, but you'll be closer to your business and learn more about it as you develop and grow.
Keeping good financial records, rather than "putting your receipts in a shoebox", makes your accountant's job of producing your statutory accounts that much easier - the better your records, the less they should charge you. More importantly, you will have some management information on which to base business decisions such as "can when I afford to buy this now?", "how much dividend can I withdraw this month? and "how much am I spending on X". All of these are important questions when you consider a significant portion of the cash in the bank isn't actually yours to spend! - be sure you know you tax liabilities and what you owe others.
Most people use a spreadseet to record transactions - revenues in, payments out - and, not forgetting other payments (e.g PAYE, Corporation Tax, VAT, Bank Charges, etc) that also affect your cash balance. Spreadsheets can work well, but yor ability to get up-to-the-minute information can be difficult and in striving for this within a spreadsheet can get complicated. And, we help a few professionals to manage their financial spreadsheets, which is one of our Office Admin Services.
Some people go straight for accounting software like Sage or QuickBooks which is fine, but there is a steep leaning curve and an overhead in time spent setting it up and maintaining it. If you have plans to grow fast and are in for the long haul, then this may be your best option.
Office Lifeline has taken the middle way, and use the Finance Database Templates that come free as part of our VHQ WebOffice. Being a simple relational database data entry is simple and encourages us to follow good practice processes, and it produces instant views on the current financial state of our business when we need it. We don't have to wait until next month for a Book Keeper to produce their historical reports - it could be too late!
Which ever way you go, think forward and plan for moving your data to your next system. So, if you use spreadsheets, make sure you organise the data in columns - the first row contains the Field Name and each other row is a Record - that way you can import it into any database/system later. Similarly, if you use a more sophisticated solution, make sure you can export your data as a .CSV file.
In all cases, it would be a good idea to consult your accountant before you set off for his advice on record keeping, accounts structures and cost codes. If you can align yourself to them, it will save everyone time and money in the long run.
For more ways to help you save time, money and hassle Search This Blog or visit www.office-lifeline.co.uk
