Good bookkeeping is one of the golden keys that unlock business success. Whether you’re hoping for greater profits, a wider network or clients or customers, or simply looking for ways to cut expenses, the answer can nearly always be found in the books. If you need extra assistance in this area, you can learn more about available accounting services where you are, so you do not fall behind with any financial requirements.

Here are some of the ways in which better bookkeeping can lead to greater profitability and, ultimately, expansion.

Claim Your Expenses and Deductibles

Business expansion often depends on fluid cash flow and solvent finances. Everything you can do to maximise profits and minimise outgoings will put your business one step closer to successful expansion. Making sure you’re claiming all your expenses is one thing some business owners fall down on. Even small expenses such as bus tickets can mount up over the year.

  • If you have dedicated business premises, make sure you’re submitting the correct claim for rent, insurance, heating and lighting. Even if you use part of your home for business purposes you can claim a percentage of your bills against tax.
  • Keep track of mileage and make sure you’re logging every business trip. Save your fuel receipts, logging each against the entry for miles travelled. Some people keep a small notebook in the car, and jot down distance and purpose of travel each time so they don’t forget.
  • Claim all your hotel and travel costs when you’re away on business. Make sure you only make claims for business expenses, and that you’re not mixing costs for personal pursuits.

In the same vein but falling under a different category are your capital expenses. These costs are the ones incurred when buying equipment for business use, such as your business computer or tools of your trade. Capital allowances can be offset against tax and may include building fixtures as well as plant and machinery.

Organise Your Invoices and Receipts

It’s vital you stay on top of invoices, issuing them on time and keeping an eye on payments so you can follow up with those that remain outstanding beyond your written terms. Allowing invoices to remain unpaid affects your cash flow, and can be disastrous for startups or those working on small margins.

Organising receipts is equally valuable as this forms the basis of your proof of expenditure. Every receipt needs cataloguing correctly so you can find it quickly for cross reference purposes in your accounting system. You can take scans of photos of paper receipts and store them digitally, which cuts down on the amount of paper you’re physically storing.

Take Advantage of the Cloud for Accounting

While it doesn’t really matter what system you use for bookkeeping (as long as you have some kind of system), technological advances such as cloud computing have made routine activities much less cumbersome.

Subscription based accounting packages can help automate and streamline keeping accurate accounts. Set up a bank feed so your transactions are synced to your cloud package, then all you need do is go through them on a regular basis to create the correct explanations and keep everything neatly categorised.

Many accounting packages will also create automatic reports so you can check on performance and make changes where necessary.

Hire an Accountant or Bookkeeper

For many business owners, regular bookkeeping is either a chore they would rather not get involved with, or take up time they’d rather put to use in other business activities. Because bookkeeping needs regular maintenance, professional services are there to keep this vital aspect running smoothly.

A bookkeeper will take care of day to day activities throughout the financial year, preparing books that are properly organised and ready to hand off to an accountant. The accountant will then take the prepared books and perform the necessary collation to prepare your tax return, calculate expenses and deductions.

Accountants are also often able to give some business advice based on the financial health as reflected in the accounts.

Taken individually, the points are a relatively small part of the whole. When they’re added together you have a set of comprehensive and accurate accounts that, when analysed, can make an ailing businesses more profitable and put it on a faster track to expansion.