Ok, so you’ve realised another tax year has ended. You’ve barely recovered from your scramble to submit your tax return on time in January, surely it’s not time for all of this again? Every year you swear it will be different, but every year you employ the ostrich technique until the last possible minute. You always have a sick feeling after you click on the submit button – “I’m really not sure that’s as accurate as it should be”…..
Well, it’s decision time. There are two roads you can take from here; the first is familiar territory and will result in you losing the last two weeks of January and feeling a panicked mess. The second is different. It requires a bit of effort. So you decide to make a change; to do things differently this year. But then you think; “BUT, it’s ages until January, I’ll look at it in the Autumn”… Sound familiar?
So what if I told you there are things you can do NOW which will make your life easier come tax return time? Things you can put in place which will mean not only do you tie up 2016/2017 in good time, but that you knock 2017/2018 into shape and end up with a better idea of how to manage your business finances!
1. Go through your receipts now. Put them into piles, depending on how they were paid – one pile for things paid for from your business bank account (a bank account you use for your business, if you have one), and the other for things you paid for with your own funds / cash. Some people find it helps to use one envelope for each month.
2. Get your bank statements (for the business account) together. You might need to download these from your internet banking account. Keep them in a file / envelope with the bank account receipts.
3. Sort out your mileage records. It doesn’t matter how you keep them, as long as you keep them! The chances are this will involve going through your diary. It’s boring, so start chipping away at it now. You need the date, the purpose of the journey and the postcode of where you went to. Don’t forget the return journey! There are various calculators online which will help you to work out your mileage, and some of them will allow you to download your journeys and print them for your records.
4. Ok, now it’s time for money in – your sales. If you pay money into the bank, try to keep a record of what you have paid in, and where it came from. If your customer invoices are numbered, this can be as simple as writing the invoice number on the back of your paying-in slip stub.
By going through these things now, when you sit down to do your tax return you will already have done a lot of the ground work for working out the figures. Alternatively, if you don’t want to do your own tax return, your records are better organised, the chances are you will already have saved yourself some accountancy fees!
Food for thought…. The tax return you submitted on 31st January 2017 was made up of figures from your business year that ended 5th April 2016. This means that if you left it until the last minute, you only became aware of the performance of your business a whole nine months after the year ended. That’s a long time to be behind in terms of knowing what’s going on in your business. In order to grow your business, there are two things to look at; bringing more money in and reducing what goes out. If you can see what’s happening in your business month to month, you will be in a far better position to react and to implement changes.
Did you know?
There is a wealth of software out there (some free, some paid for) that can help you keep on top of your accounts. If you are still using paper invoices (or Word / Excel), consider using some software for this instead. Invoicing software can do a whole host of things which save you time and ensure your records are accurate, such as numerical sequencing and emailing the invoice directly to your customer. If you tend to collect lots of small receipts, software with an app could help you keep track of these expenses.
Even if you implement just one of the suggestions above, you will be better organised to take on your next year end 🙂
If you want to make some changes but are unsure what would help you and are wary of fees / spending lots of time, get in touch for a chat.
We will talk through what you need and your budget. From there we can help you find a solution that works for you and your business.
Small changes can make huge savings in the long term!