We all like low accounting fees and accurate financial records are one way you can reduce your accounting bill. Good quality records are far easier for your accountant to work with thereby reducing the time it takes to process your tax return.
The means of achieving this can vary as some people like to use their phone, others their PC or some might even prefer an accounting book. It really doesn’t have to be difficult. But the important thing here is that the records are easy to understand and accurate.
Keeping Manual Records
In practice, this can be as simple as getting a book and creating the structure shown above. One page for your income (the sales you make in your business) and another for your expenses (the money you spend on your business).
You will see above that both pages have a date column and this is important information because it will allow your accountant to track the expense if no other references are present.
The description column should be used to describe what the item is. So in the Income column, this might be shop till receipts for a particular day while on the expenses side it might be an electricity bill for your shop.
The Value column should record the amount received or spent. This should obviously tally with the amount shown on the paper receipt.
Finally, the reference column should contain a reference to the receipt. So the first row in the Income side might be I1. The next row I2 etc. This reference should also be written on the physical receipt that you should keep in your records. If you don’t have a paper receipt (it is always preferred to have a receipt) then mark N/A in this column.
In general, all entries should be legible and carefully added to avoid mistakes. Keeping your records mistake-free will certainly reduce the time spent filling out your tax return.
Keeping Computer Records
Keeping computer records is our preference because it is easier to transfer records (by email or sharing). These can be completed on your phone and or your PC and as such can be a very convenient way of keeping records.
The same rules apply here though with regard to careful record-keeping to ensure accuracy.
Personally we like to use Dropbox as a means of keeping these files in the cloud so that we can access them from any device and to ensure they are backed up and safe. For those who don’t know there is a free level of Dropbox that allows you to keep up to 2GB of information online and this will be more than enough for your record-keeping requirements. You can signup at the Dropbox website for free.
You can also download the spreadsheet featured in this article here.
So it’s over to you and good look with the accurate record-keeping.