People sometimes challenge my advice and recommendation to use a proper accounting system within their business for keeping books and dealing with VAT and all that accounting stuff…
Let's start at the beginning…
If you are running a business you have to keep records. So, #stopbeingadick, it’s the bloody law!
One of the reasons you keep records is to make sure you can, if challenged by the Inland Revenue, prove your income and expenses.
But, here’s the thing:
Keeping records isn’t just about defending yourself against the Inland Revenue, it’s more about gathering information in an ordered manner so that you can mine that data to help you expand and build your business.
With modern computer cloud technology, this can open a whole new world of experience and more importantly an opportunity for you.
I have been speaking with 1,000’s of clients about their books and records for over 30 years and the general consensus of opinion is that most people look at the bookkeeping for their business as a complete bunch of hassle, a thankless task, something they don’t see the point of and often a skill they don’t have, or don’t like.
Or, put it another way...
It’s like suggesting they have a regular dose of colonic irrigation!!
With modern technology, it doesn’t have to be such a pain in the arse.
There are several generic options for keeping books and records, but first of all, accept that bookkeeping and accounting is a particular skill. It’s not that hard if you are prepared to learn, but, and this goes back to the original book that first explained the process written by the father of accounting Luca Pacioli who collaborated with Leonardo da Vinci in the late 1400’s,
- bookkeeping and accounting is something that only works if done properly:
So what choices do you have?
- Hand written books - Actually this is(or soon will be) no longer a choice due to the new Making Tax Digital (MTD) laws coming into effect. Hand written cashbooks have been around for years and are cheap, easy to run, and if you are prepared to learn some skills and do the job properly then they can be a valuable tool.
The thing is, most people don’t bother to learn the skills to do the job properly, so a half-hearted attempt is made, the arithmetic is poor and basically 99.9% of all hand written books I have seen over the years are mostly a pile of crap, a complete waste of time and energy and very costly to put right.
Oh, and then everyone gets all offended when you tell them the truth and say that what they have produced actually isn't worth the paper it's written on, and they need to stop wasting everyone's time right now!!!
- You could use a computer - The power of the computer makes it an incredible tool. but now you have choices of different tools on your computer, so which is best?
- Spreadsheets - These are digital replicas of the hand written book and are cheap to create. In fact, the spreadsheet is a great tool; it allows you to create and develop your own pages, calculations, cross casting checks, even chuck in a few pivot tables for good measure and soon you can create all sorts of data reports, analysis and so forth… that is, if just like the hand written books, you learn the right skills and build the spreadsheet so it follows the bookkeeping principles.
But guess what...
Spreadsheets are the barnacle on the backside of commerce,
because most people are lazy and don't invest time learning how to use them properly and as a result often produce a pile of data full of basic arithmetic errors.
- Desktop application – I battled for years when computers first came out; the accounting software industry is huge but the resources invested often produced hard to use and quite frankly sometimes just bad bits of software that don’t follow the basic principles of accounting. So much so we ended up creating our own back in 1991 - so I really do know what I'm talking about.
But, after using desktop applications for a very long time, the same old problem occurs; the users, i.e. the business owner, isn’t prepared to put the time in to learn how to use the software fully, and the support needed to attend site and sit in front of the computer to fix all those little things that make a big difference is too expensive and thus never gets done, resulting in once again a half-hearted attempt… better than a manual book, better than a spreadsheet, but nevertheless often not brilliant...
What's the Solution:
The Internet: Finally there are now resources that are beginning to put all this together. Using on-line technology we can now have a piece of software that allows the business owner to keep proper accounting records, but can also have an effective on-going training process and more importantly have someone tweak and tidy up all those transactions that need to be done to ensure the records are close to perfection. All this collaboratively without anyone jumping in a car to have an expensive meeting.
The good news is that Making Tax Digital (MTD) is now being forced upon us all by ye ol' Gov't.
If you are going to do it properly, why not use the best tools available?
Why not tap into new ideas and techniques that over time can help you grow your business - after all, isn't the idea of being in business - To grow, make more money and have an easier life…???
Why not have someone show you how to, and furthermore be on hand to guide you and help you as your business goes forward?
If you are serious about growing your business, get out of the broke mentality and invest in a skill that you keep for life.
After over 30 years working with all sorts of accounting systems, I know without doubt that we are in a truly advanced place as far as accounting technology is concerned, and it is only going to improve.
The tools and systems available today give you easy to use options, like being able to use your mobile phone to take credit card payments from your customers, sending invoices to your customers by email with a pay now button on the invoice, so they can pay you quickly.
Or how about every time you use your bank account, the transactions are fed straight into your accounting system automatically… and many, many more easy to use benefits.
With this ease of use you also start to learn the skills and systematic approach to keeping proper accounting records, so you and your professional advisor's can mine your data and create a business that is even more profitable.
Instead of regular colonic irrigation, why not start to figure out all this and more with getting yourself a copy of my new book plus the incredible FREE gift