Do you dread doing the end-of-year bookkeeping for your small business?
Do you put off the task because you have a disorganized heap of crumpled paper that you know will take a long time to sort out?
It doesn’t have to be like this.
If you take a little time at the beginning of the year to set up your filing system, then spend a few minutes each week organizing your paperwork, the task of completing your end-of-year bookkeeping will be much more manageable.
Set Up a Filing System
To set up your filing system, you will need:
- a concertina file with twelve pockets, labeled with the months of the year
- 36 plastic wallet files
- 36 self-adhesive labels.
For each month, write the following headings on self-adhesive labels:
- Bank Statements
So, for January, you would have three labels:
- January — Sales
- January — Bank Statements
- January — Expenses.
Stick each label on a plastic wallet file and place each file in the relevant pocket of the concertina file.
Schedule Time for Filing Paperwork
Schedule some time each week for filing your business-related paperwork, perhaps on a Friday afternoon or at the weekend.
If you don’t have much paperwork, you could do your filing fortnightly or monthly.
Organizing Sales Documentation
In the plastic wallet files marked “sales”, place all documentation relating to your sales for the month in question. Whenever you raise an invoice, print out an extra copy and put it in this file.
If you receive income from other sources, for example payments through Paypal, print out the payment confirmation as soon as the payment is received and add it to the “sales” wallet.
Filing Financial Statements
When you receive your monthly bank statement for your business account, place it in the “bank statements” wallet.
If you also have a business savings account, a business credit card or any other business accounts, store the statement(s) in the same place.
Organizing Receipts for Business Expenses
Each time you incur a business-related expense, such as travel, stationery or computer equipment, place the receipt or invoice in the wallet marked “expenses” for the relevant month.
Quick and Easy Bookkeeping
If you follow this system throughout the year, the task of completing of your annual bookkeeping will no longer seem daunting. You’ll be able to supply all the relevant information to your accountant in a timely manner.