"Doing the books" - keeping track of the money coming into and going out of the business - is just one of these jobs.
Hands up all those for whom "doing the books" is something you enjoy, look forward to doing, and put aside time for.
Now hands up everyone who thinks "doing the books" is a chore and a bore and puts it off as long as they can.
And finally, hands up those who are terrified of "the books" and ignore them hoping they'll go away if you leave them long enough.
Well the books might go away, if they get mouldy enough to grow feet and walk, but I'm afraid HM Revenue aren't going anywhere.
That's one reason for keeping your books up to date. If HM Revenue come sniffing round - and they do now have the power to visit us home-business owners at home - then you need to have some nice, neat, up-to-date records to show them. It's actually illegal not to.
The second, and what I think is the most important reason, is that if you keep your books up-to-date, you have a much better grasp of how the business is doing. Can you remember everything about your business's figures?
Did Mrs A pay you for digging her garden? How quickly? Do you need to collect cash from her next time because she took ages to post you a cheque? Did you remember to pay that bill from the gas man? Are you sure? And are you paying out too much to make your business worthwhile? Is the game worth the candle?
You won't know any of that without a good set of up-to-date figures.
And the third reason is that it keeps your accountant happy. In my career I've seen dozens of sets of inaccurate, messy, behind-schedule records. That really doesn't help client-accountant relationships. Because if the records are a mess, I'm cross with the client before I get even an hour into preparing their accounts, and by the time I've finished, I'm more inclined to show the client the door than to help them save some tax.
That's why anyone who'd like to be a client of mine needs to be ready to keep their books accurate. I want to build a good relationship with you and that'll be impossible if your records are rubbish!
Don't worry though, you don't have to be any good at sums. FreeAgent will take care of all that for you and it comes inclusive in my prices. And I'll teach you how to use it, so there really is nothing to worry about.
So those are my three reasons for why it's a good idea to keep your books accurate and up-to-date.
- It's illegal not to.
- You're much more aware of how your business is doing.
- It makes your relationship with your accountant so much happier.