The 2019-20 Self Assessment deadline is fast approaching so here are some tips on how to reduce your accounting and bookkeeping bills when self employed.
Keep Proper Business Records
If you are self employed as a sole trader or business partner you are legally obliged to keep accurate business records. Missing invoices, purchase receipts, bank statements, VAT and PAYE records creates more work for your accountant, resulting in avoidable costs as well as increasing your risk of being sanctioned or penalised by HMRC.
Keep Your Business and Personal Finances Separate
As a sole trader using your personal bank account for business transactions is fine as far as HMRC are concerned, as personal and business income is treated as one. However, opening a bank account for business use only means you can rely on your bank statement to give you and your accountant a good understanding of where the business money is coming and going. Some banks may be comfortable with you operating a separate personal account for business use but check out price comparison sites like MoneySupermarket or MoneySavingExpert for advice on cost-effective business bank accounts for the self employed.
Hire a Bookkeeper
A good bookkeeper will save you time and money in the long run. However, if you use the large envelope or carrier bag filing method (see photo) you can expect to be billed for sifting, sorting and filing. Buy a couple of ring binders and use them to file all of your sales invoices and all of your purchase invoices/receipts in date order. Trust me, your bookkeeper will love you for it.
You’ll find more tips on how to reduce your accounting and bookkeeping bills in the link below.
© 2020 Paul J Lockey
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