When you make the decision to run your own business, you do it because you have a passion for what you do and you enjoy doing it. The part very few people look forward to is the record keeping, it is usually the task that can wait, writing up the books means you are not actually working and bringing in any money. But most of the new businesses that do not succeed are those that do not monitor their finances well enough.

The main point to get across to you is don’t put it off.  Doing so will soon make it become the elephant in your business room! And the longer you leave it, the harder it becomes to get started, and the bigger task you will have on your hands.

All new business owners are excited to start making their own money.  Sometimes though, lots of sales and being busy does not mean you are making lots of money. You need this information and while it would be lovely to have your own finance director following you around (maybe not all the time) providing reports on your financial position, this will be impossible on a small business budget.  However, screwed up receipts in a plastic bag or choosing not to do anything at all are definitely not going to provide you with any answers on how you are doing.

There is a large middle ground to aim for, and there is help out there for you.

Admittedly it is less often than 10 years ago, but we do come across individuals who want to avoid using a computer at all costs!  For anyone like this a pen and book to list income and expenses down is the only answer.  A very big downside to this is that it will all need to be added up manually, it is more time consuming for you and cannot provide guidance on how the business is doing at the click of a button.

Alternatively, simple in and out listing on excel can tell you if you are spending out more than you are receiving. If any changes are needed, it is easier to do in this format than in a manual book. A tax saving calculation can be added to make sure you are saving enough too. The key to these records are keeping it simple, there is no need for complicated formula.

Taking it one step further there are user friendly accounts software packages that are designed with business owners in mind.  Xero is the up and coming software that is cloud based and can take out a lot of the mundane work in bookkeeping.  Producing reports to tell you if you are profit making, who owes you money, who you owe money too etc. And the packages now are much more user friendly and easy to amend, so no need to be scared of them.

If it still all feels and sounds like too much the answer may be that you don’t write up any books but instead find someone who can.  Whether it be a partner or bookkeeper, accepting that you are someone who is never going to get round to it and realising it early on will stop the keyboard from being lost under the mountain of paperwork. And the cost isn’t usually as bad as you think.

The key is to get a plan at the outset and stick to it.  You won’t want to write your books up every day but may need to once a week so that the task doesn’t seem too big.

Keeping records is not a science, it is bringing all the information together in one place.  Once that is done speaking to an accountant on how to prepare accounts and tax returns is the next step.  An accountant can go through the dos and don’ts and it may be at this point that you hand it over to be ‘finished off’, with a set of accounts and tax return produced.