Accounts are like Brussels sprouts. Very few people actually enjoy them, but we all have to face them at least once a year!
But the task of doing your accounts can be made much easier, not only by making it a regular weekly habit to spend time on your books, but also by using modern online tools to automate and streamline your bookkeeping processes, from end to end.
Emily Coltman FCA, Chief Accountant atFreeAgent - who provide an award-winning online accounting system for freelancers and small businesses - explores some of the most useful things you can do to help automate your business accounts.
Many online - or cloud - accounting systems like FreeAgent will let you quickly and easily create estimates for new clients when they approach you and ask you to give them a quote. And, if they then accept your quote, you can convert it into a project with just a few clicks of the mouse.
Then you can track expenses, time and income against that project, so that you can see how much profit it's earned for your business.
As you carry out the work for your client, you'll incur costs, such as travelling to visit the client, or buying materials to make the goods for them.
Online accounting software can let you track costs quickly and easily on the go. You can photograph expense receipts using your smartphone, and then either attach them to the expense record in your accounting software, or let an expenses management application like Receipt Bank take care of that for you.
If you're charging your client by the hour or day, or if you simply want to track how long you're spending on different projects, you could also track that time through online accounting software packages, such as FreeAgent.
Getting started is easy. Either create daily or weekly timeslips to record the hours
or use the inbuilt stopwatch to track your time as you go. This will help you gain a full understanding of how you spend your time, you can track both your billable and unbillable hours.
When the project's finished, simply generate an invoice from all the billable time you've recorded and send it the client.
You can also produce a detailed timesheet report and attach it to your invoice.
Once you've tracked all your time, recorded your costs, and are ready, you can invoice your client for your work.
With just a couple of clicks, time and costs are pulled over automatically to your invoice, making sure you never miss charging your client for anything, thus protecting your profit margins.
You can then set up the software to send invoices automatically by email to your customers, which means you'll have no more postage costs to pay and you'll no longer have to deal with postal delays.
Even when you've sent an invoice, it can be a challenge to get paid on time by your customers - so online accounting software can make it easier to chase these payments. In addition to automatically sending invoices when you complete a project, online systems like FreeAgent also enable you to set up automatic reminder emails to chase customers who do not pay on time.
Furthermore you can also link to online payment systems such as PayPal and GoCardless, so that when you email invoices from within your software, the email will include a link that your customers can click on and pay you straight away. That means you'll no longer have to wait for weeks to get your money!
And check whether the system you're using enables you to automate your financial data through a direct feed from your bank. If it does, you'll save time and hassle by no longer having to manually upload all of your transactions; and you'll be better equipped to track everything that goes in and out of your business's bank account, so that you know if you're at risk of running out of cash.
Your online accounting system should be a vital tool that puts you in control of your business finances - and by using it to automate as many of your bookkeeping tasks as possible, you'll save yourself a lot of work in the future!
About the author:
Emily Coltman FCA is Chief Accountant at FreeAgent, who provide an online accounting system specifically designed to meet the needs of freelancers and small businesses. Try it for free at www.freeagent.com