When many people set up their own self-employed business, they may start off by doing their own books. Often when you are first starting out; it is relatively easy to keep on top of everything and you make sure that you do everything right. As you get busier, it is easier to forget and lose track of what you need to do and very quickly you can find yourself in a bit of a mess.
You need to have processes in place to help you manage your accounting. If you have receipts lying around everywhere and do not have places to keep things then you will quickly discover that doing your tax return is a nightmare. Some people do hardly any accounting work throughout the whole year and then instead do it all in one go when it comes to April. This can make it a massive task and you may find that you miss things because you are trying to go back almost 12 months.
If you do not think you can manage your accounts or do not have the knowledge and experience then it really does pay to hire an accountant or and accountancy firm. Often the money they can save you through their advice on tax and how to manage your finances, pays for their time.
When looking for an accountant or an accountancy firm, it is important to find one that you can trust. If you decide to go with a firm you may be allocated a specific person who handles your accounts. This can be handy as if you have any questions later on down the line they will already be familiar with your business so they can advise you easily.
If you do decide you want to continue handling your accounts yourself then you should try and set up your files and folders to make the job easier. Ideally you should update your records on a weekly or monthly basis so that it is not left too long. HMRC are going to be asking self employed people to update their accounts on a monthly or quarterly basis very soon so it is important to get in to the habit of doing this now. Having spreadsheets set up on your tablet or laptop where you can quickly record expenses in an evening will help you manage your business records effectively. There are also some great software packages out there that make accounting easy.