Hey Peeps! How are you doing?
It is my Ruth Noel, back with another Tax Twerk Tip!
I wanted to run through a question that one of my good friends & client asked me on the phone.
She was feeling a bit nervous about her tax responsibilities, so I was reassuring her that everything is under control and with our system it’s actually all been done. So she felt more relieved.
She was worried about the bookkeeping and asked me how to manage the receipts and paper expense records. Some of the problem questions from her included- What do you do to keep your bookkeeping records? What do I do to manage my receipts and my bookkeeping?
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Here’s the step-by-step solution:
1) I actually don’t do my own bookkeeping…!! CRAZY!
With the same automated accounting system that I set up for clients, I run this in my business. I literally use this myself and I delegate the bookkeeping and accounts to my team. It works for different types of income streams.
2) I do the same thing that I say to my clients!
Nowadays there are so many transactions involved in running a small business. We have seen even small busineeses and startup businesses have an average of 60 – 300 transactions per month. The time it takes you to manually do the bookkeeping takes you away from the number 1 priority of making sales and generating cash flow in your business.
Use your business bank account as much as possible throughout the month. It will make your life easier later when it’s time to do the bookkeeping, accounts and tax preparation. You can also link PayPal to your business account for online payments.
This way you can use get out there in front of clients. E.g. my friend who is a singer can concentrate on gigs, touring and producing her music to bring in income.
3) Now you have to store the little paper reciepts for cash expenses! Store them in a folder.
I know it can be quite tiring when you get home after a long day and you need to sort out all of your receipts and invoices.It takes up a lot of mental energy and I can completely understand. Just get them, close your eyes and drop them into the box or folder…
Or you can use envelopes. One of our drama & arts clients stores her receipts in cute multi-coloured envelopes decorated with rainbows to make it a less painful process!
4) Organise your cash receipts and invoices by CATEGORY!
Example: Have a folder or envelope for Travel, Materials, Software, etc. It doesn’t have to be organised by date order. Your accountant or bookkeeper should be able to handle it without it being organised in date order – this is too much work for you. This will save you so much time. We can do this later when we input the dates and descriptions to organise it. Job done!
5) What do you do if you can’t find all of your receipts? What do you do if you have email invoices?
HMRC and other government bodies are increasingly moving towards digital records. They’re getting kinda cool now, I’m kinda digging them… Digital is the way to go! This is the DIGITAL ERA! Omg! If you have a digital copy of your expenses or receipts. E.g. You can store it in Dropbox or within your email system.
Have the backup evidence of your receipts and invoices.
I use a software called Mojo Marketer, so when I receive invoices from them via email I label it as ‘Marketing Invoice’ within my gmail. So should I ever need to check it I can search for it within my email folders.
It goes through my business bank account anyway, but doing this can help you feel confident and comfortable when you’re running your day to day business.
If you have any questions about how NOT to do bookkeeping, drop it in the comments below.
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