In this guide, we cover the bookkeeping basics that every small business owner should know, from simple steps like keeping receipts together, to the more complex business of categorising your financial records.

The three files you must keep

As a minimum, you should keep a cash book, a sales invoice file and a purchase invoice file. Your cash book details payments in and out of your bank account, your sales invoice file details all the sales that you’ve made and whether they’ve been paid for or not, whilst your purchase invoice file details any purchases you’ve made, as well as when and how you paid for them.

If you use accounting software, you can use it to store all of these records, but if you don’t, a simple series of spreadsheets should suffice.

Check your bank statements

Spend time checking each and every bank statement you get to ensure that no mistakes have been made and that no fraud has taken place. It will also give you a complete breakdown of exactly what your income and expenditure is, and allow you to spot trends and ensure your cash book entries are accurate.

Get proof of purchase for everything

It’s best to get a receipt for everything that you buy for your business, no matter how large or small. It will make it much easier to look back through and update your records, and it will also mean that you have all the required proofs of purchase should the taxman decide to do an audit.

Separate your business and personal accounts

You should have separate bank accounts for personal and business use and should only use funds in your business account to fund purchases for your business.

Clear a regular slot in your calendar

When you’re busy with everything from meeting client deadlines to pitching new business, it can be easy to throw your receipts in a box, leave invoices on your ‘to do’ list and ultimately, lose track of your books altogether. Set aside a regular time each week – clearly marked out in your calendar as a recurring appointment – to keep on top of your accounts, and stick to it!

Remember it’s more than just ‘best practice’

Putting off going through your books and generally being disorganised is a big no-no. Not only will HMRC fine you if you are late in filing any financial documents, but you cannot run a business effectively if you don’t have a firm grasp of your finances.

If you’re struggling with your record keeping, give us a call on 01327 856076 and we’ll be happy to talk you through your options.

This guide sets out the minimum info you need to include:

Your name and contact details

In the age of email, it might seem like over egging, but remember invoices are often printed and filed with other accounting paperwork, and need to make sense on their own.

Make sure that you include your name, full address, telephone numbers and email address.

If you’re representing a business, also include the business’ name. All this will make it far easier for you to be contacted should there be any problems with your invoice.

The date and payment terms

It is vital that you accurately date your invoice, and specify when payment is expected.

Usually specifying payment terms is as simple as adding a sentence ‘Payment due Please send payment within 21 days of receiving this invoice). Note: it’s important that you discuss payment terms before beginning work for a client, but we’ll cover that in a later article.

Invoice number

For the sake of your own records – and those of your clients – it’s always worth including an invoice number. Use a simple system that’s easy to understand, such as numbering each invoice consecutively, with the first three letters of the client’s name at the end e.g. 003-MIC or 052-APP

Purchase order number

Some businesses use a PO number to pre-approve purchases at their end. If this is the case, you’ll need to include the number on your invoice so that the details can be cross-matched.

Who you’re billing

An invoice might be lost in the back office and never addressed if you don’t include details of who you’re actually billing.

Include not only the company name and address, but also the name and contact details of the person who commissioned the work.

What you’re billing for

As a minimum, include a short description of the products/services rendered. Depending on the type of work done, it may also be appropriate to break the detail down into the number of units supplied or the amount of hours/days spent on each aspect of the job.

The amount payable

Again, as a minimum, you’ll need to specify the total amount due. If you’ve included a breakdown as described above, it may also be worthwhile showing the amount charged per unit, hour or day.

If you charge VAT, you’ll also need to show what proportion of the total charge this represents in £s.

VAT number

If you are charging VAT, you may well find that a company cannot settle your invoice until you supply your VAT number, so it’s best to include it from the outset.

If you are not registered for VAT, it’s worthwhile specifying this on your invoice – something as simple as “VAT n/a” will suffice – to avoid any confusion or delays.

Your payment details

For electronic payments, you’ll need to include your account name, number, sort code and, if accepting international payments, your IBAN reference.

If you accept cheques, you’ll need to confirm the postal address and specify who cheques should be made out to.

Simple really, but so easy to miss off a single vital detail, and slow up the whole process of getting paid. So, why not set up an invoice template today with space for each of these details? Your cash flow will thank you for it!

The review, conducted by researchers at the Wolfson Research Institute based at Durham University, and published by the Cochrane Library, found mental health, blood pressure, and sleep patterns were better among people who could determine their own working hours.

By contrast, fixed-term contracts and other situations were working conditions were determined by the employer had no benefits for health. One study even showed fixed working hours had a negative effect on mental wellbeing.

For employers, flexi-time can actually boost profitability and generally improve the attitude of staff benefiting from a better work-life balance.

Jake Gordon, owner of Allyearbooks.co.uk, says his company has an extremely flexible attitude towards working hours. ‘If someone doesn’t feel very productive, they don’t have to come in.

Instead they can do a couple of hours in the evening. We don’t like having people just sitting there knowing they have to be at work until 5 o’clock. I think the benefits to staff is an improved work/life balance and reduced levels of stress, and for us a more productive working environment.

Anyone can ask their employer for flexi-time, but the law provides some employees with the statutory right to request a flexible working pattern, including parents with children under 16.

By law, an employer must seriously consider any application made, and only reject if there is a seriously good business reason for doing so. Employees have the right to ask for flexible working, not the right to have it.

Flexible working can include scheduling hours around school times, working from home, job sharing or averaging hours out over a year.

For more information about flexible working, visit: www.direct.gov.uk/betterfuture, or ask me on Twitter http://twitter.com/AccountsAssist.

Declines in business investment occurred in most industries, with the quarterly fall in business investment mainly due to reduced capital spending by industries classified as private sector manufacturing (down 16.8 %), private sector non-manufacturing (down 9.7%) and public corporations non-manufacturing (down 7.2%).

Within the private sector manufacturing the fall in capital spending was due to industries within food, drink and tobacco (down 20.8%), engineering and vehicles (down 24.2%) and textiles, clothing, leather and footwear (down 25%).

Within the private sector non-manufacturing there was reduced investment for other services (down 11.4%), construction (down 9.1%), other production (down 5.7%) and distribution and services (down 5.6%)

The reduced capital expenditure in other services was mainly from industries classified within
Other services (down 24.9%), financial intermediation (down 15.8%) hotels and restaurants (down 15.6%), real estate, renting and business (down 8.0%) and health and social work, slightly offsetting the reduced capital expenditure (up 13.4%).

The reduced capital expenditure in other production was mainly from industries classified within electricity, gas and water (down 9.2%), mining and quarrying (down 5.6%) and agriculture and forestry, slightly offsetting the reduced capital expenditure (up 5.9%).

Compared with the second quarter of 2008, total business investment fell by 18.4%. This fall was mainly from private sector and public corporations non-manufacturing investment down 18.4% and the private sector manufacturing also down 18.4%. Within private sector non-manufacturing investment construction fell by 47.0%, other services fell by 21.4%, and other production fell by 10.7% compared with the second quarter of 2008.