Good book keeping will help with self assessment tax returns filing
Book keeping is hardly the topic to set hearts and minds alight. However, its importance for small businesses preparing and filing self assessment tax returns is grossly underestimated. A recent study highlighted that the average small business owner spends two days a year on this task and almost a quarter of businesses miss the deadline. Here, we outline five ways to help you keep on top of this onerous task.
Establish a routine to help with self assessment tax returns filing – starting or ending each day/week (dependent on the volume of transactions in the business) by noting the business’ income and expenditure – and checking the bank account for payments – will help vastly in avoiding a last minute scramble in compiling information, trying to marry up receipts to expenses. Just a few minutes spent each day will ensure accounts filing is a smooth operation, and any discrepancies can be dealt with more easily whilst the information is fresh.
Find a system that works for the business – A ‘job bag’ for each week or month can be held to file invoices, expenses, receipts and job/project logs – a simple folder to hold this information will suffice, although investing in accounting software can be a real bonus. Adams Moore offers Xero cloud bookkeeping software, which can generate recurring invoices, facilitate digital expenses logging and provide bank reconciliation from one user-friendly platform, for true efficiency. The best part about using such software is that, if using an accountant for self assessment tax returns filing, the accountant can log into the back-end of the system and download all the necessary information – saving the headache of a last minute rush as the deadline looms.
Digitise where possible – for businesses that are not yet ready to invest in accountancy software, digitising the expenses process as much as possible, by scanning receipts and allocating them to a business expense straight away, will negate the piles of receipts floating around in desk drawers. Doing this on a regular basis also prevents loss of receipts, as in the case of disorganised business owners who aren’t logging expenses, it may mean they miss out on tax relief on these expenses as the receipt isn’t there to prompt them.
Track mileage for each journey – keeping a notebook in the car to log business mileage at the end of each journey is simple and will make the task of logging mileage expenses more accurate, as well as negating the chance of forgetting certain journeys and again, missing out on the tax relief for this travel.
Book keeping is undoubtedly the least favourite part of business operations, but one of the most crucial for business efficiency and to avoid the self assessment tax returns filing nightmare that occurs annually.
For further information on effective book keeping or the latest accountancy software, get in touch on 01827 54944.