14/05/2020 by Beki Wallace AATQB MIAB 0 Comments
WHY HAVING A SHOEBOX IS THE WORST MISTAKE EVER!
You have just finished a hard day’s work. There is nothing more you want, but to put you feet up and
relax. Admin in the evening is not what you signed up for.
You put all our paper receipts in a shoebox tucked up on the shelf and tell yourselves it’s all there
safe for you to sort out later.
The box is overflowing and it is now tax season! It gets bagged up and shipped off to an accountant!
YOU 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 you possibly missing? The world is changing and more and more things are becoming digital. Many of your receipts are now sent to you by email. It is likely that your shoebox doesn’t contain half the expenses you need to account for. Every receipt missing could result in more tax being paid. It is essential that you record every expense, paper and electronic, so you only pay the tax due and not a penny more.
TRAVEL EXPENSESAre you supposed to be recording travel? Do you even do any business miles? Many of you are working from home and not travelling out, other than for essentials. Working from home requires some set up. Maybe you need to purchase a new laptop, printer, microphone? You popped to the shop and the receipt is in the box, but have you 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 YOUR TIMEDo you want to spend hours sorting out your business finances? You could be making money working rather than wasting your time bookkeeping. Managing your business finances doesn’t have to be stressful and can be done quickly and easily if processes are in place. Let’s not waste your precious time sorting out the shoebox, organise as you go. Save time, save money.
All the information is in the shoebox. The accountants only have to sort and file your 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 you have to keep track of what comes in and goes out? Seems like a lot of hard work. What harm could it do if you leave it all to the last minute? If you don’t keep an eye on your income and expenses how can you predict our cash flow. You 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 you to promote growth and prepare for change.
It is all in the shoebox! It may not be arranged or in order but you know where it all is. Isn’t that a good thing? When you are not organised with your finances, you are often not organised with others things in life too. Having organisation makes you more efficient, saving you time and money.
HOW TO AVOID THE SHOEBOX!
Having a shoebox of receipts actually costs you money, but what can you do to avoid it?
Here are 3 SIMPLE STRATEGIES to make managing your finances a breeze!
Are there processes and systems in place when it comes to managing our finances? Have you ever spent ages looking for one bit of information? Being more organised makes you more efficient, saving time and money, both in business and in life. Having processes in place and organisation allows you to better understand your business and how you 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 you could record your finances with a few clicks. Quick, straight forward and hassle free, why wouldn’t you try it out?
EXPLORE APPS & AUTOMATION
There are thousands of amazing apps out there many offering automated features. Designed to meet your specific needs, regardless of industry.
There will be an app for you 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.