For your business to succeed an organized and accurate bookkeeping must be practiced. Keeping all records of expenses and income is imperative to practice for the purpose of accountability. You need to be informed where you stand financially on daily weekly and on a monthly basis. Knowing your financial status on a regular basis will help you meet your financial obligations and goals as well. Failure of this critical knowledge means you’re not in control of the business which mostly in these situations the business end up collapsing.
Hiring a financial administrator is very vital since they can ease the burden of dealing with bookkeeping which helps you focus on other matters related to business growth. But not all business can afford the salary that financial administrators usually get. A financial administrator salary ranges from £18000- £20000 per year that means on every month your small business will have to pay an average of £1500 salary to its financial administrator. This kind of amount most probably small business cannot afford, but fortunately, there are other cheaper options that a small business can go for and achieve the same objective. Here are some few ones
The cheapest way is doing your own bookkeeping
Not every small business can afford even to hire a part-time financial administrator, so the only option that the small business owner has is to learn how to do bookkeeping. In today’s world of technology, there are free courses online that any business owner can enroll and sharpen his or her bookkeeping skills and most importantly learn how things are done with these free resources.
Hiring a part-time bookkeeper and an accountant
Hiring a professional freelancer part time bookkeeper can be a cheap option for a small business. They usually charge around £15-£20 per hour. They will record all your expenses and income, file tax returns, prepare your financial statements and support accountants with preparations of an end of year financial statements. Part-time accountants will conduct financial audits, reporting, and analysis and most importantly offer you financial advice.
Setting up a bookkeeping system
The importance of a bookkeeping system to a business is that a business can keep accurate records of all financial transactions. This will help you keep track of all financial activities of the business, ease the process of securing a loan, pay your taxes and help you to make a comprehensive report of your business at the end of the year. The cost of a bookkeeping system is less than £300
Get an accounting software
Mostly the design of these software’s are meant to meet the needs of all types of businesses starting with sole traders to large businesses. An accounting software will invoice customers on your behalf, analyse how your business is performing, calculate your VAT, manage your budget and manage your income and expenses. These software’s some are free, and others will charge you less than £600.
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