How can I save time with my accounts? Four tips that can help you

Running your own business ischallenging and often time consuming. It would probably be fair to say that the most frustrating and non-profitable activity that all business people have to engage with is the management of their accounts. Incomings and outgoings all have to be accounted for across the board, not only to manage the business correctly but also to have a clear set of accounts for possible inspection of your books by HMRC.

Most people who go into business do so in the trade that they are skilled in, and just because you are a great plumber or software engineer doesn’t necessarily mean that you will also be great with accounts. If this was the case, there would be far fewer accountants in the world! There are many ways the self-employed or a small business can improve the management of their books on a day to day basis without having to rely on their accountants in the usual mad panic towards the end of the tax year.

So what can the average person do to manage their accounts more efficiently, saving time in the process?

Here are four top tips that can help you:

1. Keep all your paperwork in order

This might to seem self-evident, but it is surprising how easily you can lose track of paperwork when your own business gets going. It’s easy to put aside the essential backroom maintenance of your own business when you are so busy servicing the needs and demands of your clients.

From the outset, establish a filing system that will be easy to maintain, even if it is only a couple of box files. All incoming invoices from suppliers go into one box, all bank statements into another, all copies of your own invoices to clients into yet another, and so on.

It doesn’t have to be overly complex, but you must have a clear designated place for your paperwork so you can quickly retrieve it when necessary. You will be surprised how some basic procedural discipline will stand you in good stead in the longer run.

All of this is especially true in the electronic age. Do you receive most of your invoices electronically? If so, you will have to make the decision of whether you will be printing off hard copies for your records or whether you will be filing these records electronically.

If you do try and opt for the paperless office approach, make sure that you back up your electronic files either on The Cloud (online data hosting) or on a separate computer or memory stick. Also think about how your electronic filing system will work; are you going to have a naming system for your electronic files so they can be easily retrievable by search? And which electronic documents go into which electronic files? Just because you’re paperless doesn’t mean that you can forgo the necessary rigours of document control.

2. Set aside time to manage your accounts daily

Again, this might seem the obvious thing to do but so few of us actually do it. Partly this is down to the psychological tedium of managing one’s accounts. Another reason is that it is non-profitable activity that gets in the way of the ‘real work’. Others think they’ll put it off, and ‘deal with it’ when necessary.

If you run your own business, however, there is no escape from the reality that you have to manage your accounts one way or another. And while putting it off is one strategy, it is one that will guarantee an even greater sense of dread and panic when the time comes to confront and update your books.

The simple fact of the matter is that if you managed your accounts on a daily basis, the whole problem becomes a non-issue. Depending on the size of your business and turnover, one should be able to manage one’s accounts by setting aside half an hour a day to do them (and even then it should not take you this long). You will soon find that keeping on top of your accounts on a daily basis dissipates the workload of bookkeeping and that your accounts will soon be in good order.

An approach of ‘a little and often’ is the best way to avoid stressful scenarios with your own books. To maintain the discipline to sustain this approach, put in your diary a daily appointment with yourself to do your books, and treat the appointment with the seriousness and rigour that you would with one of your own clients.

3. Employ a bookkeeper

If these two suggestions are really beyond you, and you cannot face the prospect of managing your own accounts, you can employ a bookkeeper to manage them for you.

Obviously, this will be an additional cost to your business and you will have to calculate whether you can afford it. Also, depending on how much you pay yourself, you may want to compare the cost of you doing your own books at a pro rata rate with that of employing someone part-time to do them for you.

However, rigour and daily discipline should mean that you can forgo this cost, especially as there are so many new tools on the market that can help you keep your records.

4. Use an online accounts package

The internet is a wonderful thing, not least the aspect of cloud computing. In layman’s terms, cloud computing means that the computer programs or software that used to be hosted on your own computer on your desk are now run straight from the internet. In turn, this means that you can access and use these programmes wherever you are, as long as you have a connection to the internet.

The world of accountancy is moving with the times, and I developed Prelude Accounts to meet the needs of the modern business person. Programs such as Prelude Accounts simplify and semi-automate the bookkeeping process, ensuring your books are updated when you generate an invoice, and that invoices can be e-mailed straight from the program to your clients.

You can use Prelude Accounts at anytime and anywhere you have an internet connection, so you don’t have to wait to get back to the office to generate that invoice or record that payment you have received. In other words, you can manage your accounts in ‘real time’, thereby diluting your own workload further, saving you valuable time in running your own business.