Bookkeeping and Accounting Systems
When it comes to running and managing the finances of your gardening business, you’ll need to have a good and efficient bookkeeping and accounting system in place.
All businesses need to keep on top of their finances and, if they don’t, they run the risk of encountering problems - with their employees, customers, banks and even HM Customs and Revenue. When you’ve previously only had to keep your own private finances in order, it can be a bit of a shock to the system to suddenly have to manage your own company too, especially if it expands rapidly. But if you want your business to succeed, it’s essential that you get reliable bookkeeping and accounting systems in place as soon as possible.
If this isn’t a task you fancy taking on yourself, then it’s a good idea to employ either a bookkeeper, accountant or even both. A bookkeeper may come in on a regular basis, such as once a week, to go through all the invoices you’ve sent out, all the invoices and receipts you’ve received, and could even sort out your payroll, so you’re paying all your employees on time.
The term ‘bookkeeper’ comes from the traditional way that books were used to keep these essential records. Many companies still do things the old way, using three books to keep the records updated – a cash book, a sales book and a purchase ledger. If you or your bookkeeper has decided to use this method, then you’ll need these three books.
The cash book lists all the money that goes into your gardening business account, plus all the money that’s going out. It’s essential that it’s kept up-to-date so you know where you stand with your banking. The sales book lists details of all your invoices in numerical order and divides them into months. The purchase book is where you list all the purchases your business has made (but, don’t forget, you still need to keep all the receipts, so they can be used as proof of purchase when you complete your tax return).
Computerised Bookkeeping and Accounting Systems
In addition to the more traditional methods of bookkeeping and accounting, there are also a wide range of computerised systems available these days. Software such as this is very popular with all types of businesses, from small to large, and is something your gardening business may want to explore in more detail.
The benefits of using computer software are that it can make it easier if you’re not that financially minded. There are pieces of software that can control your payroll, so you automatically know when and what to pay employees, and act as your cash book, purchase book and sales ledger.
If you are using software to handle your bookkeeping and accounts, then do make regular back-ups and make regular print-outs of data, in case any problems occur. Keep any back-ups and copies stored away from the main computer you use. A small portable hard drive is good to use for backing up and can be removed from your office premises and stored elsewhere.
However you choose to handle your bookkeeping and accounting, and whether you’re doing it yourself or hiring a bookkeeper or accountant, the important thing is to make sure it’s kept up-to-date and that you retain the same consistent system throughout.