DIY bookkeeping – 7 steps to ensure you are doing it right
1. Use a software/system that you are happy with. The first step I would suggest is getting a system that suits you and your business. Accountants tend to favour systems that allow more checks and may be a bit more rigorous, so you may want to ask your fellow business colleague what they are using. The type of business you operate may mean a particular system may suit you better. As most software come free with an initial free period you can try them before buying or using. The key to processing your data is that you must be able to see your sales, expenditure, profit, monies owed to you and monies you owe. Cloud computing has opened up the door to a proliferation of free software that enables all businesses now to have the option to undertake their own bookkeeping. This is good news for even the smallest businesses who can now take control of their own record keeping. No longer do you need to hold the figures in your head or wait for your accountant to put them together at the year end.
2. Make sure you understand your business processes
This is linked to choosing the software that suits you in (1) above, but goes a bit further in that your recordkeeping needs to mirror your business processes for e.g. if you have stock you need to have a system that enables you to record your stock and work out what is left at a period end. If your business is property sales or letting, you need to have a system that shows the processes for your tenants’ deposits and repayments for example. This is where talking to your accountant may help or to your regulated body if you have one, who may be able to suggest a suitable software.
3. Set aside time to do it
Finding the software to use can be like getting a new toy – the novelty can wear off very quickly especially when the reality sets in that you do need to “do it” to get the information to manage your business. Planning your business day may be a useful way to approach this, so that you factor in time to do your recordkeeping. This is of course not written in stone so that you cannot vary from it (without suffering unnecessary guilt!), but because it is written in your daily routine you will find time to fit it in as you are able.
4. Get some training to help you
Some people may not need training to get going, some do. If you find yourself asking questions each time you try to do work on your chosen system then you may need some training to get you going. Your system may come with some training via video or other means, check this out to take advantage of any free training that is available. Training do not need to be as daunting and expensive as you may think. Many local business enterprise support agencies offer training at very good rates.
5. Keep up with the processing
Bookkeeping is ongoing so you need to ensure you can keep up with your processing once you get going. If your business is VAT registered you are obliged to report VAT every quarter which is one way of ensuring you keep up with the recordkeeping. Knowing what your trading information is at any point should hopefully be enough motivation to keep on top of the processing.
6. Get help if necessary
If you find in spite of your best efforts keeping up with the processing is getting the better of you, particularly if business is betting busier, getting help may be your next step. It is always useful to get a family member to help as you can pay them with the wages being part of the household income as well as being a tax deductible expense. The UK Government offers help with apprenticeships and many local colleges are looking to get students on work placements who could be a source of help.
7. Ask what other people are doing
Finally, check out how DIY bookkeeping is working for your business colleagues. You never know, they may have some good business practice you can adopt or you may have some you can share – it all goes round in the big circle of keeping business going.