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All incoming and outgoing payments and other financial transactions need to be recorded throughout the year. These records should be retained for at least six years from the end of your accounting period. When recording income, you will need to differentiate between your fees and your expenses (or other ‘recharged’ items). You will also need to keep a record of income from other sources, such as bank/building society interest. Records of outgoings need to be categorised according to type. Examples of some categories you might need to consider are:

Marketing;

stock;

subscriptions/meeting fees;

office equipment;

office supplies;

post and courier costs;

travel, fares,

parking and subsistence;

telephone and internet;

sundry; accountancy and professional fees;

insurance.

Many small business owners opt to do their own bookkeeping, with or without the help of a computer software package. If you opt for a software package, choose one that fits your legal status (company or sole trader), uses English rather than accountancy-speak and easily produces reports. Increasingly cloud based products are proving popular as you, an accountant and book-keeper all have access. Check out ‘Quickbooks online’ for an example of this approach.

Alternatively excel spreadsheets can do the job and these are absolutely fine, free and give you the control over your financial position and work very well for businesses with a very small level of transactions (for instance management consultants). Most accountancy firms should be able to supply you with some sample excel spreadsheets and a bookkeeping guide to help get you started.

If you are really averse to bookkeeping, consider hiring a bookkeeper to help out. Bookkeepers charge between about £15 and £25 per hour depending on geographical location and experience and can be found in most local business directories. Fundamentally, bookkeepers are responsible for recording the transactions of your business and filing the paperwork and doing that all-important bank reconciliation (accounting-speak for ensuring that everything that has gone through your business bank account is recorded in the bookkeeping entries and vice versa).

 

 
Email allan@allaneslersmith.com or call me on 07775 696052