Why Not Waste Time On Your Paint And Sip Accounting?

What Is Accounting?

Accounting is the process of recording, summarizing and reporting financial transactions. 

I asked a few people how they ran their accounts, and had 3 general answers: They use spreadsheets, let the accountant deal with it all, use an on-line accounting software.

Get An Accountant, And Use Them As Little As Possible.

Do your own accounting, but don’t try and do your own tax return at the end of the year, it’s not worth the hassle. Get an accountant specialising in small businesses and sole traders and give your accounts to them to do the end of year work. Do this and you will save so much time and stress because you know your tax returns will be correct. Furthermore, because an accountant did them, it reduces your chances of a tax inspection. Your accountant is tax-deductible as well by the way.

“I Use Spreadsheets”.

I took this to mean that you manually enter all your bills and sales onto a spreadsheet, or book, as they arrive. You total everything up every month and reconcile your bank statements, PayPal account and card account every month. This must take a few hours a week. It also must cost as your accountant (you do have one don’t you) has to keep going over your accounts, and getting back to you, at year end to clarify issues. This method though, does keep you in charge of your money.

“I Give It All To My Accountant To Do”.

I took this to mean that your accountant deals with all bills and receipts, and all you do is write the cheques and sign the end of year accounts before they go off to HMRC. This must cost a packet, but doesn’t take you much time. This way doesn’t keep you in control of your money though, as you depend on your accountant keeping you informed. They could also run off with your money.

“I Use A Software Package”.

I take this to mean that you have effectively automated your accounts process to both save you money, save you time and keep a good financial hand on what you do. This is the best thing to do, and here is why…..

How I Do It.

There are a number of on-line software packages around; Xero, Zoho and QuickBooks are just a few. QuickBooks has been around the longest.

I use QuickBooks because I have always used it and see no need to change. It costs me about £26.00 a month, but there are introductory offers. I’m not going into fine details here, but just give an overview.

My QuickBooks system is linked directly to my Barclays Bank account, PayPal account and Zettle (card merchant) account. I never use cash, always card. Whenever I buy something in any way, or receive ticket sales the link from my accounts to QuickBooks means that QuickBooks gets ready to absorb the figures – no manual entry.

Twice a week I go into QuickBooks and see what is waiting. I check to make sure it is being properly categorised for importing into QuickBooks. By this, I mean the money I spent in Hobbycraft on canvases has actually been allocated to the “canvas” category rather than something else like “meals”. QuickBooks gets it right most, but not all, of the time. I make any corrections, and then import the data.

The only manual entry I need to do is enter any invoices for payment I am sent (this is a must). Ticket sales are categorised as receipts and are done automatically. The only other manual action I have to take is reconcile my bank accounts in QuickBooks. I reconcile my accounts at the end of the month, and often find that QuickBooks has already done 90% it for me.

At the end of the year my accountant gets access to the QuickBooks files, emails me the end of year tax forms, and sends them off to HMRC.

It takes me less than a couple of hours maximum a week overall, and costs very little to do. I have complete control over my money and my financial position. I also minimise my accountant’s fees as most of the work is done by QuickBooks.

Setting Up QuickBooks

Setting up an on-line service is easy. Buy the service, enter the names of the categories you will use – “Paint”, “Brushes”, “Canvas” etc. Set up any regular bills that you have in the same way. If you have problems phone user support. Link to your bank accounts and let it roll. It will take 2 – 4 hours to set up, with an additional 10 – 15 minutes every so often. But once it is done it will save you soooo much time and hassle. I will say more about this in another post.

Please email me at [email protected] if you have any questions or comments.

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