The Small Business Owner’s Journey to Cloud Accounting – Getting Ready

The Small Business Owner’s Journey to Cloud Accounting – Getting Ready

THE SMALL BUSINESS OWNERS JOURNEY TO CLOUD ACCOUNTING – GETTING READY

As a small business owner we have a lot to take care of, some we love and some we most definitely do not.  Keeping your books tends to be one that is least loved. It can be time consuming and quite often confusing, being put off until the very last minute.  Then your financial year end rolls around, at which point you bundle the vast amount of receipts and invoices into a box or bag and head off to your Accountant and hand it all over for them to sort out.

Now there is a couple of problems with this method of bookkeeping.  The first is that your Accountant is going to charge you for this, which can be quite costly.  The second is much worse, as you’ve gone all year without having a clue exactly where you and your company stand financially now or at any point in the last 12 months.

This can be the case whether you use accounting software or not but there is a much simpler, more efficient way to keep your books, so as a small business owner you have your up to date financial information to hand 24 hours a day, seven days a week.  Cloud accounting!

Sat here writing this I’m wondering about the different reactions those two words have evoked in you as a reader.  Are you thinking “wow, that sounds amazing”, or maybe “there’s nothing wrong with the good old fashioned way, leave my Accountant to it” or is it “I don’t do technology, I’ll have to manage as I am”?  No matter which of these has been your response, you should consider the fact that cloud accounting is here to stay and at some point you’ll need to get on board, like it or not. Even HMRC is planning to bring UK tax into the digital age with “Making Tax Digital”.  This means your tax returns will have to be submitted digitally through an MTD compliant software and all business related transactions will have to be recorded digitally using MTD compliant software or apps.

You might ask what the point of it all is, but I can tell you hand on heart, that cloud accounting will change your business and your life and I want to take you on that journey.  By now you’ve probably gathered that I’m a small business owner who actually loves bookkeeping and you’d be right. Why? Because that’s what I do. 30 Hour Days is a digital bookkeeping practice, which means we work entirely in the cloud and are 100% paperless.  We work solely with small businesses, helping them move to cloud accounting and take advantage of all the benefits it brings with it. Over the next few weeks I’m going to show you step by step how to start your journey by recommending the best software to use, providing guides to get you started and discounted subscriptions to save you money.

Why not sign up below so you don’t miss the next instalment.  I’m looking forward to getting started and hope you’ll join me.

Wendy

Tips to help with your VAT

Tips to help with your VAT

TIPS TO HELP WITH YOUR VAT

Mention VAT and most business owners groan at the thought.  But if you stick to good accounting practices, VAT doesn’t have to be the headache.  Below are a few simple steps which will help you get your VAT under control.

ACCOUNTING SOFTWARE OR EXCEL

Excel is OK in certain circumstances, but if you are VAT registered, make sure you are using accounting software.  By using accounting software it makes it so much easier to calculate your monthly or quarterly return and it can be done in seconds.  It also eliminates the risk of double counting invoices, will take into account any late claims for VAT and in some cases you can even submit to HMRC direct from the software itself, no need to login to the HMRC website.

 

MAKE SURE YOU’RE ON THE RIGHT SCHEME

Being on the right scheme is crucial. Is the flat rate scheme for you (i.e. VAT is calculated on your gross sales for the applicable period)?  Maybe the annual accounting scheme would work better?  If your business struggles to get money in from your customers the cash accounting scheme may be for you, where you don’t pay over VAT to HMRC until your customer has paid you.  Speak to your accountant to ensure you are on the best scheme to suit your business.

 

GET A SEPARATE BANK ACCOUNT

We all know what its like when the VAT bill rolls around again and you’re wondering where you are going to find the money to pay it. Well break out of the cycle and set up a separate VAT account and never have to worry again.  The best way to do this is to set up a second bank account rather than just transferring it on your accounting software as this can lead to confusion when reconciling your bank.

Speak to your bank and arrange a second bank account which acts as a savings account without a debit card so that you can’t dip into it in ‘emergencies’. Then at the end of each month run your VAT return for the month which has just finished.  Check through your VAT return as you normally would and if you are happy that everything has been recorded correctly transfer the VAT amount which you owe to HMRC for that month into your savings account. Do this at the end of every month and you will never have to worry about paying your VAT bill again. The money will always be sat in your savings account waiting for the end of each quarter. When it comes round to paying HMRC simply transfer how much you owe out of your savings and pay it over to HMRC.

 

ON THE RIGHT TRACK

Hopefully these steps will help you take the stress out of dealing with your VAT.  If you’d like to have a chat with us about how we could help you with your monthly bookkeeping, including your VAT, please get in touch, we’d love to hear from you.

Happy Bookkeeping!

Faye