14/05/2020 by Beki Wallace AATQB MIAB 0 Comments
WHY HAVING A SHOEBOX IS THE WORST MISTAKE EVER!
We have just finished a hard day’s work. There is nothing more we want, but to put our feet up and
relax. Admin in the evening is not what we signed up for.
We put all our paper receipts in a shoebox tucked up on the shelf and tell ourselves it’s all there
safe for us to sort out later.
The box is overflowing and it is now tax season! It gets bagged up and shipped off to an accountant!
WE HAVE JUST MADE THE WORST MISTAKE EVER!!
Is it really that bad? What is the worst that could happen?
Having a shoebox full of receipts will COST YOU MONEY, let’s explore why.
ADDITIONAL TAXAll the receipts are in the box, job done! What are we possibly missing? The world is changing and more and more things are becoming digital. Many of our receipts are now sent to us by email. It is likely that our shoebox doesn’t contain half the expenses we need to account for. Every receipt missing could result in more tax being paid. It is essential that we record every expense, paper and electronic, so we only pay the tax due and not a penny more.
TRAVEL EXPENSESAre we supposed to be recording travel? Do we even do any business miles? Many of us are working from home and not travelling out, other than for essentials. Working from home requires some set up. Maybe we need to purchase a new laptop, printer, microphone? We popped to the shop and the receipt is in the box, but have we recorded the mileage travelled to collect the item? Every business mile travelled can be claimed. This includes trips to the shop to buy stamps, stationery, to the bank or post office and even trips to the petrol station.
TAKES UP OUR TIMEDo we want to spend hours sorting out our business finances? We could be making money working rather than wasting our time bookkeeping. Managing our business finances doesn’t have to be stressful and can be done quickly and easily if processes are in place. Let’s not waste our precious time sorting out the shoebox, organise as we go. Save time, save money.
All the information is in the shoebox. The accountants only have to sort and file my return. Hopefully it won’t cost too much. Having the information presented in a state of chaos means it will first need to be organised and arranged. This process alone can be very time consuming, especially if the receipts are folded up, faded or damaged. The receipts then need to be recorded and reconciled before final accounts can be prepared and returns submitted. A bookkeeper can manage all business finances. An accountant will charge more for this service.
If documents lost or things are left to the last minute it may result in a late submission and a fine from the tax man. Maintaining records regularly will ensure that the accounts are up to date and returns can be submitted quickly and easily.
Do we have to keep track of what comes in and goes out? Seems like a lot of hard work. What harm could it do if we leave it all to the last minute? If we don’t keep an eye on our income and expenses how can we predict our cash flow. We could spend too much money resulting in overdraft fees. Cash flow is vital to ensure the business is able to continue to operate.
Having knowledge of how money moves in and out of the business throughout the year will allow us to promote growth and prepare for change.
It is all in the shoebox! It may not be arranged or in order but I know where it all is. Isn’t that a good thing? When we are not organised with our finances, we are often not organised with others things in life too. Having organisation makes us more efficient, saving us time and money.
HOW TO AVOID THE SHOEBOX!
Having a shoebox of receipts actually costs us money, but what can we do to avoid it?
Here are 3 SIMPLE STRATEGIES to make managing our finances a breeze!
Are there processes and systems in place when it comes to managing our finances? Have we ever spent ages looking for one bit of information? Being more organised makes us more efficient, saving time and money, both in business and in life. Having processes in place and organisation allows us to better understand our business and how we can support it to grow.
USE ACCOUNTING SOFTWARE
Accounting software is often user friendly, designed for the everyday client. Capturing all business expenses is vital. Using accounting software can make it much simpler with receipt capture functions. Many will have bank feeds and bank rule assistance. This means we could record our finances with a few clicks. Quick, straight forward and hassle free, why wouldn’t we try it out?
EXPLORE APPS & AUTOMATION
There are thousands of amazing apps out there many offering automated features. Designed to meet our specific needs, regardless of industry. There will be an app for us and many are free.
From task and invoice reminders, automated responses (Chat Bots), calendars, travel trackers, customer management apps, you name it, it’s available. Trial a few to find which works best.