How to manage your bookkeeping FSB, The Federation of Small Businesses

bookkeeping 101

Accurate bookkeeping will save you money and time in the long-run, so it’s best to tackle it properly from the beginning. As the saying goes, death and taxes are inescapable, so let’s see what your options are and how you can manage your bookkeeping needs in a way that suits your business. There are many bookkeeping packages available, such as QuickBooks and Sage. There are even free bookkeeping software downloads, including Microsoft Office Accountant Express Edition and Pandle.

bookkeeping 101

Balance sheets are the summaries of your assets, liabilities and equity at any given time. The balance sheet provides valuable insights of the company’s financial health. The profit and loss statement of a business gives an exclusive breakdown of your company’s revenue, cost and expenses. In the beginning you may operate your business with a single bank account. You can start using multiple accounts once your business starts to add more people and payments start to diversify.

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As a director you’re separate from your company, so you’ll need to report the business’s finances, as well as your own income. Check out our video guide to bookkeeping for limited companies. Make sure all bank statements and invoices are present and correct, and in date order.

Your monthly reports should include a profit-and-loss statement and the balance sheet, as a minimum. Now you have a running commentary on how well your business is performing. For a one-person business you may as well real estate bookkeeping stick to cash accounting. Cash accounting is a form of accounting where revenue and expenses are recorded when cash is received or paid. In this system transaction takes place with the direct exchange of money.

Does a small business need a bookkeeper and an accountant?

It’s always worth investigating your payment terms with suppliers. After all, if you can settle your bill in 60 or 90 days rather than 30, you get to keep your cash a while longer and regulate cash flow. Sales forecasting is all about predicting what’s ahead to prepare for cash flow peaks and troughs. You can start forecasting cash flow once you have a month’s sales behind you. For example, you can use it to automatically pull transaction records from your bank account, so you don’t have to manually enter each transaction.

  • At Auditox Accountancy, we offer tax efficiency services that lower the cost of your tax bill.
  • In the long run, if you are planning to do all your bookkeeping yourself, this may save you time and money.
  • If you are a limited company making a profit, you are liable to pay corporation tax.
  • This is often a cost-effective way that speeds up the recording process.
  • If you want some help with this, download our free, simple to use Excel spreadsheets templates for petty cash.
  • Bank reconciliation makes sure that there are no wide inconsistencies between these two.
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