Keeping your accounts up to date when self-employed

Keeping your accounts up to date when self-employed

Being self-employed can have many benefits such as working the hours that suit you, not having to answer to an employer and taking holidays to fit in with the family however most people in this position would have to admit that one of the disadvantages is the bookkeeping and filing of tax returns.

Employing an accountant is a wise choice as they can often reduce your tax bill by claiming for everything that you are entitled to claim for, but the month by month bookkeeping is usually completed by the self-employed person or their secretary.

The accounts need not be over-complicated, and a series of spreadsheets are usually sufficient. The first spreadsheet ought to show income with a record of the date the invoice was given to the client, invoice number and amount. A further column will show the date the invoice was paid and the method of payment.

The second spreadsheet will show expenditure. This will include columns showing the date, amount paid, method of payment and recipient. A further spreadsheet or an area on the expenditure sheet can be used for vehicle expenses.

It is wise to bring these sheets up to date on a monthly basis as it is more manageable overall.