Preparing for the New Financial Year

Unless you use one of the accounting software packages that takes and uploads the photographs of all your expenditure receipts and invoices, you are still required by HRMC to keep paper records of all these for 6 years. This is regardless if you are a Sole Trader or Limited Company. In this blog post I share how I organise my paperwork for this and also keep track of everything financially on Microsoft Excel.

Receipts more than your invoices tend to make the most mess or get lost! They are all different sizes and find their way into your pockets or bag at random times. The main reason they get ‘shoved’ somewhere impractical is that there isn’t an easy system in place to file them effectively.

Likewise with paperwork, if there isn’t a system in place that’s easy to access it often just goes in a pile of other papers you have which becomes lost, thrown or shoved in a draw as you don’t know where to put it.

What follows is a simple and quick way to stay on top of your business financial filing.

 

Overview

  1. What you need

  2. Setting up for your folder New Financial Year

  3. Setting up excel to track your income and expenditure for the New Financial Year 

  4. The way this now works

  5. How Busy Lives! can support you with this

 

 

  1. What you need 

You just need four items to gather and you’re set up for the year ahead.

  • 1 x A4 Lever Arch folder
  • 2 x File Dividers labelled by month
  • 12 x A4 Plastic wallets
  • 2 x Sheet of bright A4 coloured paper or card

 

What are the best A4 folders to use?

Lever arch folders clasp

The type of folder you buy can really make a difference. To a certain extent it will depend on your budget as they range from £2.00 up to £30.00. The most important consideration when purchasing any is to open and close the lever arch mechanism a couple of times and check it  closes correctly. If it looks anything like the picture here avoid, as when you go to turn to a specific month all the contents will either become stuck or fall out.

 

I often get asked which are the best A4 folders to buy. In terms of the clasp mechanism I would definitely go for an ‘Ergogrip Binder’ as it is the best one I’ve come across for durability and also stays in place on your shelf looking professional and smart.

In terms of Lever Arch, go for one which is a thick PVC which will stand up on its own without falling over. I also like to be able to insert my own label down the spine so that I can update it when it has a new use, without the folder becoming ‘scruffy’ to the eye with writing scrubbed out and new titles written.

What are the best file dividers to use?

There are many types of file divider on the market. Try to avoid the paper ones if possible as they don’t tend to wear well when the folder is used frequently. My preference are these A4 Monthly ones which have a reinforced tab and hole punch spine. They always look as good as when you purchased them and you’re not having to count the months every time like the 1 -12 file dividers to remember which financial month you’re in!

 

 

Setting up for your folder New Financial Year 

  1. With one of your sets of file dividers place an A4 plastic wallet after each month in your folder.
  2. Insert the mixed file dividers and wallets into your folder commencing with April on top and the last three months of the financial year after December.
  3. Put your coloured card or paper in a plastic wallet on top of this in your folder. You can also print Expenditure on the paper / card if you wish.
  4. Now put your second set of file dividers on top of this. Again start with April at the top.
  5. Put your coloured card / paper in a plastic wallet on top of this in your folder. You can also print Income on the paper / card if you wish.

 

 

The way this now works 

Income Section – This top section of your folder can now be used for inserting and filing invoices you send each month. I always put the latest dated invoice on top within each month.

Expenditure Section – File your expenditure invoices within the month of your order, again with the latest date at the top.

Receipts from that month simply go in the plastic wallet behind your invoices.

 

Top Tip

If you also like to tack both your income and expenditure on excel this is a quick and simple way to ensure you’ve entered everything. I simply highlight the date on invoices and receipts after I’ve entered them onto my excel spreadsheet. Easy and quick cross check!

 

Setting up excel to track your income and expenditure for the New Financial Year 

There are some brilliant digital financial packages out there such as: Zero and QuickBooks. I highly recommend you speak to your accountant as to which package would suit you and your business. If the size of your business doesn’t warrant this and you still use excel to track your income and expenditure you may find the following useful.

Create and name the following sheets giving them a tab colour if you wish:

  • Annual Expenditure
  • 12 Month Cash Forecast
  • Expenditure
  • Car Related
  • Bank Statements
  • Income Invoices
  • Client Analysis
  • Thank you

The Pictures below show how each of the pages is then set up:

 

 

 

 

 

 

 

Top Tip

If you are really busy with client work find a regular time each week / month when you can update it.

Alternatively, update the sheet after you send a batch of invoices out to clients or have cross checked against your bank statement for when the money went into the bank.

 

  1. How Busy Lives! can support you with this

Busy Lives! was created when I left a busy career that left me time poor and not able to give sufficient priority to what really mattered to me. I provide services like these for local small businesses and this frees up their time to focus on bringing in greater income for their own business. A ‘win-win!’

I am happy to help by:

  • Setting up your financial folders.
  • Filing your paperwork and receipts keeping your folders up to date.
  • Showing and teaching you how to use excel to manage your finances.
  • Letting you have a copy of the excel finance master I’ve created and use with my business.
  • Dealing with your invoices, bills and reconcilliation on QuickBooks or Zero on either a weekly or monthly basis.

Let you help you gain precious time back. Ring Busy Lives! 07565 722 031

Drop me a message on LinkedIn / Messenger on Facebook

Or Email: karen@busylivesnottingham.co.uk