Bringing your business idea to life is exhilarating. It is also quite stressful. There is a lot more that goes into running a business than you realise when you simply look from the outside in. When you are operating things and juggling different parts of your business, you realise it’s much more difficult than expected. With that multitasking and extra stress, mistakes can easily be made. Let’s look at some of the most common errors people make when they do their own bookkeeping.
Separating Business & Personal
We’ve spoken before about how it’s essential to split your personal and business finances. Simply having two accounts allows you to do this and it’s the easiest of things to set up. Having a bank account which is just for your business will allow you to see how much the business is bringing
in and make your end of the year paperwork much easier. New banks such as Tide and Starling make the account opening process simple and quick, and they also feed transactions directly into most leading accounts software saving you time and potential mistakes.
Failing To Budget
New businesses often take a while to start turning a profit. If you don’t have a budget in place, you’ll soon find yourself with no money in the business and facing the grim reality of shutting up shop before you have barely started. You need to know the ebb and flow of money through your
business.
Lack Of Organisation
Before launching your business, you need to know exactly how you’re going to file receipts and keep track of invoices. Having processes put in place so you can keep on top of your finances helps to reduce stress. Money and numbers are one of the biggest stress factors of running a business. Having things put in place to avoid that is a good thing. Software such as QuickBooks will store the receipt alongside the transaction meaning a paperless bookkeeping system. No mountains of tiny receipts cluttering up your workspace and playing on your mind. Rest assured that if HMRC need to see any paperwork they are now happy that this is stored electronically rather than on paper.
No Business Plan
Starting a business without a business plan can set you up to fail. You need to have a plan in place which will show how you plan to get from where you are to where you want to be. Going gung-ho into buying products and employing people without knowing how you’re going to make the money to cover these expenses is a mistake.
Bookkeeping should be at the top of the list for business owners to organise. If it’s not your strong point and you’d rather an expert looked after this for you, please get in touch. After all, you didn’t set up your business to become a bookkeeper, did you!