amir

Bookkeeping is one of the administrative priorities for any self-employed individual. Maintaining accurate records of your income and business expenses is essential as it helps you understand your finances and track progress against any targets or cash needs you may have. Bookkeeping also helps you to provide your accountant with the information they require to finalise and submit your annual self-assessment tax return. When it comes to your annual income and expenditure as a sole trader, it is important to retain records of all your invoices and receipts. This makes it faster for your accountant to reconcile your financial records. Process your self-assessment to calculate any tax liabilities or refunds. It also helps you deal with any questions HMRC should raise about your tax affairs. What records do I need to keep as a self-employed person? Unlike the rigid bookkeeping and reporting requirements for limited companies, those for the self-employed are more relaxed. However, this does not make it any less important for individuals to track their finances. Do you keep asking yourself the question “What records do I actually need to keep?”. We have set out a brief summary below as a guide: All forms of income Keep track of your invoices or other supporting documentation for all forms of income generated through your business or self-employed work, as well as any additional personal income. All forms of business expenses Keep all expenses and receipts that relate to your business or self-employed activity, as these may be deductible from income when calculating your profits in your annual self-assessment tax return. You don’t need to submit these receipts in your tax return but it’s useful to have digital expense records to support all transactions should your accountants, HMRC or others need more information about your finances. VAT records (for those VAT-registered) All VAT registered businesses must also keep a record of their VAT invoices charged to customers and all expenses where VAT has been charged to them. This will support the completion of VAT returns and submissions. Bank records All bank transactions relating to your business or self-employed activities should be recorded. Your accountant can help with this by supplying you online bookkeeping software that links into most bank accounts, simplifying record keeping. Any records of grants from the Self-Employment Income Support Scheme (SEISS) It is important to note that all grants received from HMRC during the lifespan of the SEISS must also be recorded and reported as taxable income as part of your self-assessment. Do sole traders need to produce accounts? It is not a legal requirement for self-employed sole traders to publish formal accounts. However, there are often benefits to producing formal accounts – it can help owners to better understand how their business is performing and support banking relationships and requests for loans/finance. What is the best accounting software for sole traders? If you are seeking sole trader accounting software that can improve your bookkeeping accuracy and efficiency and help to make sure you are ready for Making Tax Digital, we would highly recommend the following tax accounting software solutions as a starting point: Xero The Xero software offers an award-winning solution that links well with the personal, expert service delivered by our own accountants. Xero can automate lots of your conventional accounting legwork. Including the distribution of invoice reminders and importing bank transactions to update your records. It is also easy to integrate with other Xero products such as Xero Payroll for seamless bookkeeping. QuickBooks Access your QuickBooks software 24/7 on any device, with real-time information and reconciliation from all your active business bank accounts. You can send bespoke invoices and quotes via mobile to build your brand image and reputation. Can I do my own bookkeeping? If you want to keep your overheads low and avoid paying accounting fees. It is possible to look after your own bookkeeping. However, there are risks as you will need to be 100% accurate with recording your income and expenses. The consequences of making mistakes with your own bookkeeping can be disastrous, particularly if this triggers an unexpected HMRC investigation. Professional bookkeeping can help save time by taking the pain of maintaining your own records away. Allowing you to focus on building your business and achieving the right work/life balance. It will also help you understand your business finances, monitor your cash balances. Plan for future tax liabilities and pinpoint trends to help support important business decisions. How Account-Ease Accountants can help with your bookkeeping We can look after your bookkeeping on your behalf. Saving you time and money to focus on doing what you do best – running and growing your business. Our rates are competitive and we can provide you with software solutions to help make your life easier. As a tried and trusted accountant for sole trader and business clients nationwide, we can reduce the risk of human error, ensuring accurate self-assessment tax returns are submitted and improving your business’ overall tax efficiency. We have a range of online bookkeeping services that can help to handle day-to-day record keeping and provide a smoother process for sending receipts. Invoices and expenses digitally. These intuitive platforms also enable you to make commercial decisions with greater foresight. To arrange a free initial consultation about our bookkeeping services, which can take the administrative hassle away from you , call our team today on 0208 133 4599 or drop us a line using our online enquiry form.