Can you believe it’s almost the end of another tax year? I’m pretty sure it wasn’t long ago that I was fumbling around, trying to get my accounts in order, ready to complete my last tax return. But this year, there’s a difference. I decided that I wouldn’t leave everything until the last minute again. It’s just too stressful.
You don’t need to invest in an expert, or any kind of software to keep on top of your accounts. It’s actually pretty easy to stay organised throughout the tax year, as long as you’re willing to create some new habits. The first thing you need to do is set up a system; one that will allow you to keep on top of your income and expenditure at all times.
1. The Spreadsheet
The easiest way – I’ve found – to keep track of everything incoming and outgoing is to use a spreadsheet. Set up a section for each month. Remember, the tax year runs from 6 April to 5 April. In each section, you need two columns: income and expenditure. If you want to keep things really simple, you can just make a note of the date, amount and what the cost or payment is for.
You can also add in further information, such as references, invoice numbers etc. I like to keep track of as much information as possible in my spreadsheets. A detailed record makes for a straightforward tax return experience.
2. The Trays
It’s not always possible to add every income or expenditure to your records straight away, particularly if you process a large number of orders daily, or if you have a lot of suppliers or employees to pay. It’s really not a problem, as long as you keep everything organised.
Print out all of your invoices as you go, and put them into two trays. One will be labelled incoming and the other will be outgoing. At least once a week, you should empty out these trays and add everything to your spreadsheet.
3. The Folder
Your folder is the final resting place for your accounts files. Once you’ve added everything onto your spreadsheet, you should file it away in once place. I use an expanding file with 12 sections; one for every month. At the end of the tax year, I go through the folder and check that everything matches up with my spreadsheet. Then I can use the spreadsheet to perform a calculation that tells me my profit or loss.
Once my tax return is ready to go, I print off the spreadsheet, archive it along with all documents for the year and start the process all over again.
How do you stay organised during the tax year? I’d love to hear about your process.
