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5 golden rules for managing your accounts

Accountant's bills are high. Here are tips to lessen the load

Since accountant’s bills are generally high, it makes sense to lessen the load on them. A few simple rules to follow should help cut the bills.

  • Keep the paperwork. No matter where you store it, keep a record of everything. Keep bank statements, keep credit card slips and bills, keep invoices and keep payment receipts.
  • Keep a check. At least twice a year, if not quarterly, have a spring clean of your records. Check payments and credits against your bank or credit card statements. Make sure the right money is moving in and out of your account. We have all heard the stories of people losing thousands of pounds in bank “errors”.
  • Keep the books. If possible, enter everything into a book and tally everything by numbering invoices, payment receipts and payments in. This tedious paperwork costs heavily in hours spent by the accountant. If you do not have the time or inclination to do this, then try and find a bookkeeper whose hourly rates will be lower than that of your accountant.
  • Keep it computerised. Nearly all accountants are happiest when receiving a good set of accounts on a disk. Find out what package suits them best or is compatible with your system. The taxman will take computerised tax forms too so if you are not using an accountant, this will also help in any direct dealings.
  • Keep saving. In a perfect world, every self-employed person would put aside at least one quarter of every cheque they receive, ready for the tax bill. In reality it does not happen like that. But bear in mind that the tax bill will arrive and you will need to have set aside sufficient money. It helps to set aside a certain contract payment for tax from the moment you invoice it. That way you have not mentally spent the money on anything else. But it is safer still to save regularly – perhaps have a special “tax” account which you put a direct debit into monthly.

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