Bookkeeping For Small Business: Simple 5 Step Guide To Get You Started

Is there an easy way to do bookkeeping for small business? And what do you need to keep for the tax man? Follow our 5 step action plan and you will be in control!

1. Take action

Don’t delay! Putting it off just makes it worse. Follow this simple step by step guide today, or put a time in your diary this week to make a start to your bookkeeping.

2. Tools Of The Trade

On your shopping list, you need just three readily available things:

a) A lever arch file, one you will enjoy using
b) Plastic punched pockets
c) A set of dividers, labelled for each month

No excuses!

3. Get Filing

For each month, start with the business bank statements at the front. Behind that, copies of any invoices you have sent, and then bills like telephone. Finally at the back, the loose receipts in the plastic punched pocket. Remember, any expense in your accounts without the receipt could be disallowed against your profits by the taxman. So this filing and sorting can really save you money.

4. Start A Spreadsheet

A spread-sheet is great place to start until your business is big enough to warrant an accountancy package. If you are not VAT registered you will need just one worksheet. Simple! First, label the columns. You need a date column (A), a payee/payer column (B), an amount column for expenses (C), and an amount column for income (D).

If you are VAT registered, separate out income and expenses on two worksheets so you can add Net, VAT and Gross columns. If you want to get more sophisticated you can add more columns (E, F, G etc) to create a table with expense headings at the top, like direct expenses; postage, package and stationery; telephone/internet. You can then get an idea of what you’re spending on each.

Copy the transactions from your bank statement on to your spreadsheet.

5. Total The Lists

For each month, check the beginning bank balance plus the income, less the expenses equals the bank balance at the end of the month. Cash expenses can be listed separately (preferably on a separate worksheet).

Please note that following the five steps above will give you your income and expenses on a cash accounting basis (recording the income or expense on the date you receive or pay it). Only certain businesses can record their accounts for their self assessment tax return this way. Who is eligible? Unincorporated businesses in the UK beneath the VAT registration threshold will be able to start accounting for their income and expenses using a simplified cash based regime for financial years starting from 1 April 2013.

Don’t despair however. By keeping a running total of income and expenses and you have made a start to your bookkeeping for your small business! Congratulations! This will help you keep track of your income and expenses, so you can make the right decisions for the future.

Obama Promotes Health Insurance Reform As Pro-Small Business

The political process has been working somewhat in reverse with healthcare reform: instead of selling the bill to the public first and then passing it, supporters are tasked with marketing legislation that has already become law.

President Obama is making his move, going on tour to stump for his plan nationwide. He is especially looking to appeal to small businesses. The constituency goes beyond business owners themselves; such firms are a key driver of economic growth. With Americans worried about jobs–and a stagnant unemployment rate of over 9%–Obama is trying his best to tie the two issues together.

Last week in Maine, he said that health insurance reform would save jobs. The bill offers an immediate tax credit to businesses with under 25 employees, which the administration predicts will save them $40 billion by 2019. Specifically, the credit will initially be for 35% of the portion of insurance premiums paid for by the employer. After 2014, they will receive tax subsidies for up to 50% of their group health insurance expenses.

Especially nowadays, health benefits and other perks are attractive to potential employees, especially those considering firms that would be eligible (average annual wages for the companies must be under $50,000). The tax credit may allow those businesses who don’t currently offer such benefits to hire more valuable workers, which could increase efficiency and profits. About four million small businesses could claim the tax credit between 2010 and 2013, as well as two years after they initially file for it.

According to Obama, small businesses will be able to hire more employees, despite an insurance mandate that will affect small businesses over the next decade. Many are worried that the requirement, which will first affect larger businesses and gradually impact smaller businesses over the next decade, will hurt employment by making employers provide affordable health insurance coverage to their employees or pay a fine.

Employers are also concerned about the possibility of minimum coverage standards as well as higher taxes, which may increase their net expenses. Small business administrations, such as the National Federation of Independent Businesses, are skeptical that healthcare reform will help them. Health insurance exchanges, which will allow small businesses to use collective buying power to get lower rates, could work in their favor.

Home Business Opportunities For The New Economy – Make 2013 Your Best Year Ever

It’s 2013 and you’re committed to making a change for the better. Please know that this new year is standing before you with arms wide open awaiting your fresh ideas. So what magic ingredients are vital in your new home business? The game has changed in the last couple of years and I would like to share some insights.

First, assess your environment. Your environmental assessment includes writing down as many factors as are pertinent to your success as you can think of. Ask yourself some of these questions:
Where do I live? A big town? Small town? This matters because, for example, if you live in a small town with a small population you have fewer potential customers. If that is the case you have to consider competition. Is there already an established competitor in place? Are you sure there’s room for another? Remember, the smaller the environment the smaller the customer base. In that case you might consider a venture that you can do online as well as locally.

What culture do I live in?? Younger people? Older people? Wealthy people? Not so wealthy people? Make sure your business aligns with the culture of where you are. Older people? Think home services. Paint kitchens. Clean kitchens. Right? On the other hand, think about the younger population. Childcare, anything related to fun, second hand kids store, cater party picnics and whatever else you can dream up for a more youthful population.

Assess yourself. How much time can you devote? Any physical limitations? Obviously you wouldn’t want to start a roofing business if you’re afraid of heights. Have you shopped for a business that you can see yourself doing and enjoying? Maybe you don’t have a bunch of time to devote to a home business but still need to make some extra money. Sell products via an online store? Excellent idea – you can offer your products locally as well as online. Get a rear window decal for your car with only your web address on it. (Hey, this works!)

Assess your finances. The amount of financial resources available to you will definitely guide your options. Don’t be thinking you need a bunch of money to get started. You could start the largest lawn care business on the planet if all you have today is a lawnmower. Some amazing home businesses can be started for less than a hundred bucks.

Last but certainly not least, consider this the biggest roadblock to starting your own home business. Fear. So, as my wife would say – just get over yourself. Most successful home business owners ( or ANY business owner for that matter ) will tell you to just do it. Don’t get everyone’s opinion. The less you talk about your planned venture the closer you move toward pulling it off. Keep it a secret and surprise them when you’re up and running!

Outsourced Marketing: Could This Be Your Budget Life Saver for 2013?

With the recession still biting and budgets becoming smaller, or at the very least becoming more difficult to justify, there is an ever increasing pressure to only pay for what you actually need, and that seems to apply most especially to marketing spend.

Often overlooked, and regularly the first casualty of any budget cuts, marketing is an essential element to any successful sales campaign.

There is a tendency to cut back on what is sometimes considered as a ‘nice to have’ area of the business. It is one of those areas that are needed to drive momentum, but it isn’t doesn’t always provide immediately obvious results. It’s a longer term return. But to remove the momentum that consistent and on-going marketing activities add to the sales cycle will see an impact further down the line in the sales funnel and pipeline.

Perhaps your business is growing and your need for more marketing resource along with it, and now you’ve reached a cross-roads and you are pondering which route to take: do you recruit a full-time permanent marketing resource or do you outsource to a specialised partner?

Maybe you are currently handling marketing yourself in-house as well as trying to manage your business and your sales team, and are now thinking the time has come to find some additional support that can provide that essential marketing experience.

But marketing can be expensive, especially when you have to factor in a full-time head-count with all the additional costs that come with that: pension contributions, holiday entitlement, healthcare insurance, etc. And not to mention having to pay for days not worked due to absence.

There are pros and cons with both, but in the current climate the pros lie mostly with the latter option; outsourcing.

Outsourcing enables an organisation to pick and mix their marketing requirements, to only purchase what they actually need, and only when they actually need it. During quiet times when marketing activities traditionally tail-off savings can be made by simply switching the marketing activity off or dialing it down. However, when you do need it the most, you have a dedicated resource that is focused and committed to producing results.

As a business you are acutely aware already of the need to control costs, so any opportunity to keep costs down and fixed where possible, whilst also offering a straightforward and practical solution, is well worth considering.

Outsourcing allows you to spend more time on managing your core business activities, and less time on managing your marketing projects.

Is Your Small Business Bookkeeping Ready For 2013?

It’s that time of year again. No, it’s not National Bookkeeper’s Day (no one has quite gotten consensus on when that is!) It’s time to get your financial statements ready for 2013. What are the signs you need to start prepping for the new year?

First, you see recipes for turkey everywhere. Then the lines wrap around big box retailers as people try to get the lowest price of the year on an iPad mini. Then it’s Christmas, Hannukah, lots of food, office parties. (We offer some tax tips for planning your big shindig here.)

Finally, it’s New Year’s Resolution time and then, right around the time fourth quarter estimated taxes are due in mid-January, it’s time to break those resolutions, especially if they involved things like stress eating or maintaining a positive outlook when it comes to financial planning.

Should Your New Year’s Resolutions Include Small Business Bookkeeping Help?

If handing over your financial statements to your tax accountant for year-end estimated taxes makes braving the Black Friday crowds look like fun, why not let 2013 be the year you finally get help with your small business bookkeeping and financial forecasting?

With a virtual bookkeeper, you’ll pay one monthly fee (usually lower than the salary of an in-house bookkeeping staff), and enjoy the benefits of a certified, trained bookkeeper who works when you work, keeps your business information confidential, and doesn’t waste time around the company water cooler because she works from home in a private, secure office space. You don’t have to pay benefits, unemployment insurance or social security taxes for your virtual bookkeeper. She will manage your daily, weekly and monthly small business bookkeeping needs so you can focus on your business.

When you line up your part-time virtual bookkeeper, they will first sit down with you and reconcile your books for the past quarter, if necessary. Then they will discuss your bookkeeping needs and custom design a bookkeeping package, which also includes a part time financial controller, to fit your small business bookkeeping needs and your budget.

Best of all, if you make the move now to hire a part-time virtual bookkeeper and financial controller, they can get it all straight in time to start 2013 fresh and to submit your Q4 tax statements accurately and on time. If that sounds even better than fresh baked pumpkin pie, give us a call or email us today.