We are rapidly approaching the end of the business year, and those clouds of bookkeeping catch-up needs are now transforming into a ticking timebomb. Bookkeeping mistakes throughout the year are easy to make but are about to become your worst nightmare to unravel. The good news is that bookkeeping services in Manchester have time to help you get back on track before the end of the year. To help, maybe you should look into these common bookkeeping mistakes to help identify where things are going wrong so we can help you.
Have you claimed personal expenses against the business? That is a big no-no, and surprisingly is one of the biggest mistakes people make – especially when self-employed or running a small business.
While an easy mistake to make, HMRC has strict rules. The general guidance is that it should be wholly and exclusively for business. If used personally, it is not a business expense. If you only have that expense because of your business then it is claimable. You must also avoid categorising those expenses incorrectly. Avoid using General Expenses, Miscellaneous or Sundries at all costs – because before you know it, you’ll have no clue what they are for.
Instead, use categories such as Salaries, Insurance, Advertising, Software, Professional Fees, Travel etc that are useful.
One thing you have to stop doing is uploading receipts that are not fit for purpose. Whenever you ask for a receipt, ask for a VAT receipt – because you cannot claim VAT from a card receipt. Card receipts also do not clarify what it is you bought either.
When uploading invoices/receipts, always ensure that they are actual invoices/receipts and not delivery notes, statements or shipping confirmations. Also, take a clear picture scan of the entire invoice – not just the amount. Without this clarity, it can end up rejected for both tax and VAT claims. It is also imperitive to not procrastinate as you will likely cause plenty of issues, such as losing receipts, forgetting what half of them are for or struggling to remember how they were paid.
That will also affect your data being updated, meaning your financial decisions will struggle to make sense.
Disposing of Records
You must keep your bookkeeping records for a minimum of 7 years. At any point, HMRC could choose to audit you, and you will need to prove where the money was moved to.
To help, you could store your records in Google Drive or have financial software such as Xero to keep most of your paperwork stored for easy access.
If the Autumn clouds are getting darker overhead, it is time to contact bookkeeping services to get you back in shape before the financial year ends and avoid common bookkeeping mistakes. Contact the friendly team at Pebbles Bookkeeping for bookkeeping services in Manchester today.