10 Must Follow Accounting Tips

1.    Don’t carried away when creating your financial accounting system. Keep it simple and easy for you to use and understand. The more complex the system, the more chance mistakes can be made. Create a modest operandi for handling your financials and stick to it. Create list of monthly and weekly scheduled tasks concerning and paying bills.

2.      You need to secure your own future and since it is your business you need to take some of your profits and invest them into a retirement fund. If you do not start your own retirement fund no one else will for you. It is recommended that 10% of your profits be placed in your fund.

3.       The rules regarding taxes change every year so it is a good habit to stay on top of the new HM Revenue and Customs’ policies. Take a meeting every year with our advisor or read some literature so you can make yourself aware of the accounting rules.

4.       Keep an eye on any outstanding balances. If you notice that they are piling up, you may want to institute sterner collection policies. Make sure that your payment procedures are written on every invoice sent and should be reviewed with the client beforehand. Normal time to allow a payment to be received is 15 to 30 days after the receipt of the goods or services. Failure for your clients to pay on time can cause huge problems with running an effective business as they are sitting on your capital.

5.   Begin to set purchasing limits within your own company. Require approval for purchases that exceed a certain set amount either by yourself or a manager / executive. Make sure that the purchase orders / expense reports are complete and detailed with notes as to the importance of the expenditure.

6.       If you find yourself too busy to balance your own financial records, then you may want to hire someone else to keep track of your transactions. You don`t have to hire someone full-time as we have book-keepers who will work part-time at an hourly basis. This will help you stay on top of your financials while still be able to focus on your business.

7.       The world has become a dangerous place due to cheques fraud, so make sure to establish boundaries between yourself and your bank. Create monetary limits for cheques, Set-up a special account for paychecks and keep all other cheques made out to business and not individuals. Keep your cheques in a locked, secure location.

8.       It is important to keep up-to-date records on all of your financial activities. This includes, paying bills, payroll, expenses, and profits. These records will be needed at tax time and it helps immensely if they are already current.

9.       Make sure to check your billing statements. Be on the lookout for any extra or hidden charges as unnoticed they can add up to a big expense quickly. Insure that you are only billed for the services / goods that you have received.

10.   Also, while looking at your statements or invoices, it`s a great time to review the expense of doing business. If you appear to be spending too much money in one area, you may wish to find a cheaper, more cost effective alternative.