January 20 2017 - If you are a small business owner, freelancer, or an entrepreneur, doing your own accounts might be quite a frightening prospect. However, spending money on an accountant might not be something you can afford to do. Don't worry, though, doing your own accounts can be simple. Here are some tips to help make sure you get it right.
Open a Separate Bank Account
It can be tempting to use your own personal account. If you don't employ staff, and have very few expenses, it may seem easier. However, at some point you may need to prove all of your income and your businesses expenses. With a separate account, you can print bank statements more easily. You can also get some great deals on business accounts from high street banks.
Even with a separate account, keep everything. You'll need records of all your income and expenditure for at least two years, but preferably five. So, keep all of your receipts and invoices, as well as a print out of a monthly bank statement. Keep them in neat, orderly files, with any notes attached.
Set Up a Spreadsheet
As well as keeping invoices and receipts, set up a spreadsheet on Excel. If you need any help with this, there are some great templates online you can download. A great idea is to have one sheet for expenses, and one for payments received. Number all of your physical receipts, and put this number on the spreadsheet. Be sure to include dates, amounts, and names.
If you don't employ staff, you still need to figure out how much, when and how to pay yourself. When it comes to staffing, you may hire a freelancer to help with designs or marketing. Keep track of what you pay them and when. Any employees you hire will need to be paid on a schedule, and you'll need to hold back any relevant taxes.
Making sure you understand accounting, and especially tax at the very beginning, is the best way to be sure you are doing it right. Consider taking a course, or at least doing your research. If you know anyone that works in accounts, ask them to look through your systems and spreadsheets for you. Collect any information you need for your tax return well in advance, and be prepared. You'll need to file forms for employees and freelancers you have hired, so make sure you have them.
The most important thing is to make sure you get it right from the start. If you didn't, now is the time to correct your mistakes. Don't leave it too long. If you haven't started yet, make sure you have a system in place from the get-go. If you are interested in learning more, an online MSA degree could help.
Studying an online MSA program would teach you everything you need to know about accounting, while not taking time away from your business. It could help you both now, and with any expansions you may consider in the future.