Seeing the wood for the trees

Seeing the wood for the trees

It can be easy to ignore a problem and hope that it goes away – but eventually, it becomes evident that you have to roll up your sleeves and deal with it! If your problem is cleaning the bathroom (even after having all the family in the house over the Christmas period) then that’s not too bad, but it can be a different matter entirely if it’s your bookkeeping.

A friend recently came to see me with a with a wordless confession: a box full of unordered haphazard till receipts, letters, invoices and cheque stubs representing a year of freelancing.

Faced with the task of getting her records into order at the end of the year, she was completely out of her depth, and explained that working as a freelancer left her only only an hour or two a day to dedicate to her accounts, without neglecting work for her clients.

She had tried at various points during the year to  type up all the bits of paper onto Excel , but got just part way and lost track or just couldn’t do it all in one go so quit each time without making any headway. By not organising her receipts as she went along through the year – a very understandable thing to do – the task became overwhelming and, as the deadline for self assessment looms, is now urgent.

I shared with her a simple trick which another freelancer had shown me years ago, to organise her records quickly and easily:

  •  Buy a big diary, a pen and a stapler! By a big diary I mean an A4 one with full pages for each day.
  •  Now set aside a chunk of time each day till you catch up and in that time go through the box and staple each invoice, receipt etc into its corresponding day in the diary and if you can remember any details about what the payment or receipt was for, make a quick note next to it on the page.
  •  If the diary is overflowing then buy two – one for receipts and one for payments!
  • Once that you’ve completed this process, you can transfer this data onto a spreadsheet with far greater ease. If necessary you can always flip back to find the receipt or payment information later if necessary instead of scrambling around in a box.

Clearly, this method only works up to a point (after which hiring a professional bookkeeper or using an outsourcing service such as that provided by our Accounting Support team would be advised) but it can be a fantastic aide for a sole trader/consultant.

Armed with this advice my friend began to work through the ‘box of shame’ and was able to sort through the box in record time, and with her records now in good order she will be filing her tax return well before the 31 January deadline.

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Chris Gent
Partner at Wilder Coe
Chris provides clear, tailored advice to each client on the preparation and completion of statutory accounts, corporate tax compliance and matters relating to corporate finance. As a trusted advisor and consultant to owner-managed businesses, his expertise and insight into the running of small and medium-sized businesses is highly valued.