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What is bookkeeping and how do you keep on top of it?

February 19, 2020

Bookkeeping is the process of recording your company’s financial information, which makes it easier to understand how much money is coming in and going out of your bank account. You can use bookkeeping to manage your personal finances, and it’s essential for any small business.

It’s the cornerstone of every successful business: keep on top of your bookkeeping, and you can manage your financial health with ease. Let it slide, and you’ll struggle to know whether you can afford next month’s stock if you can pay your taxes, how much you can pay yourself, or even if you can afford to continue trading.

As accountants, Crunch cannot overstate the importance of bookkeeping to you and your business, which is why we wanted to run down a few of the very best bookkeeping habits you need to get into as soon as possible.

Best bookkeeping habits

Be consistent

Set aside a few minutes every day, or a dedicated block of time each week, to update your books and maintain your financial records. If you don’t get yourself into a routine, you’ll find bookkeeping is a messy and time-consuming process.

book keeping spreadsheets

Our key tips are:
● Make sure you keep digital records (even a Google or Microsoft Excel spreadsheet is better than scraps of paper which can get lost)

● Pay for everything with a credit or debit card, so it’s all recorded.

● Always keep your receipts (even just a photo of your receipt will do)

● Don’t forget to put money aside to pay your annual tax bills.

Open a business bank account

Separating your personal and business finances is essential in keeping an accurate record of your company’s running costs. Even if you’re operating as a sole trader, you should set yourself up a business bank account and make sure you only use it for business purposes – it’ll spare you a lot of hassle when it comes to checking receipts and claiming back expenses.

If you’re operating as a limited company, having a separate business bank account becomes even more important as the money belongs to the limited company, not you.

Get an accountant

You may be thinking: “Of course an accountancy service would say this”, but really, the best way to keep on top of your bookkeeping is by using online accounting software.

Online services like Crunch allow you to record expenses on the fly and update your records wherever you are. Services like ours also come with in-house experts who can answer your questions and take some of the pressure off, allowing you more time to focus on what you really want to spend your time on – running your business.

You can read even more helpful hints and tips for keeping on top of your bookkeeping by visiting our “What is bookkeeping and why does it matter?” article.

Don’t forget that if you’re looking for help with your accounts or need someone to help you keep on top of your expenses, Crunch offers a complete accountancy service with unlimited support for limited companies and sole traders. We can also help you if you need to manage Construction Industry Scheme (CIS) filing and payments.

You can find us @TeamCrunch on Twitter, and on Facebook! You can also join our free self-employed community, Crunch Chorus, or join our Crunch Chorus Facebook group.

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