Three Accounting Tips all Parents Should Know

Sarah Lifestyle

As families grow, our sense of responsibility grows with it, especially in the finance department. If you’ve never taken much notice of bookkeeping or accounting before, now’s the time. Whether you’re running a business or just want a practical way to stay on top of household budgets and family investments, here are some top tips on making the job as pain free as possible.

Cloud Accounting is Simple and Quick

Most people use cloud storage and subscription services in one form or another, even if it’s just for family photo sharing. It’s easy to extend the principle to include expense lists in spreadsheets or calendar apps, or migrate small business accounts to subscription-based accounting packages. There are plenty to choose from, with a couple of the most well-known being FreshBooks and FreeAgent.

The dedicated accounting packages available make it extremely simple to rapidly complete daily bookkeeping tasks, and offer a few other benefits too:

  • Live bank feeds – very handy for those with a separate business bank account. You can see at a glance which clients have paid what they owe and which invoices are outstanding. Every time a transaction occurs in your bank account, it’s automatically synced with your books and ready for you to go through and place the transaction in the correct category. This is usually as easy as clicking a checkbox or choosing from a drop-down list of options.
  • Set up cloud billing – having different payment options for clients and customers makes it easier for them to make payments, but you can also set up price lists and templates for invoices.
  • Plan for the future – If you need, or want, to go deeper into the financial picture of your business you can generate profit and loss reports, graphs that illustrate cash flow or get estimates on your next tax bill. It all helps you see the overall financial health of the business which is important not just for future planning, but for family security if your business is your main or only income.

Streamline Accounts to Suit your Needs

Despite so many people shrinking from accounting, it doesn’t have to be a nightmare of figures and complicated equations. In fact, it shouldn’t be. Your accounting system should only ever be as complicated as your business demands, so you’re not bogged down trying to keep records that you’ll never need.

It’s perfectly okay to run a simple ledger in which you record expenses and income. If you don’t need anything else, why make it more complicated? If pen and paper just seems too stone age, start a bookkeeping spreadsheet in Excel. Create formulas to add up column totals for a quick bottom line overview, and either have one workbook sheet that extends throughout the year or open a separate page for each month and carry the previous balance forward.

The most important thing when you’re keeping accounts is that you have a system you understand and find easy to maintain. Daily upkeep is vital otherwise you soon get so far behind that the task becomes overwhelming.

Delegate the Job

Accountants and bookkeepers are there to help, so make the most of them if accounting is a constant headache.

You can mix and match professional help in various ways. For instance, maybe you don’t mind keeping the books up to date through the year but you hate filing your tax return. In this case, keep you own books and hire an accountant for your end of year taxes. Just make sure you speak with your preferred accountant first and find out what format they prefer books presented in.

Other people love putting together all the facts and figures that go into a tax return, but struggle with the daily routine of maintaining books. For these, a bookkeeper is the solution as they will take on the job of keeping accurate, up to date books for you.

And if you’re just not that interested in any form of keeping accounts for yourself, hire both bookkeeper and accountant to take care of the entire process.

Probably the most important tip is to take accounting more seriously and give it the attention it deserves. Accurate bookkeeping provides more than records you can give the taxman – it also shows where money could be saved, providing bigger rainy day reserves or greater business profits.