Month End Checklist

Good Morning!

So Monday morning is here and I hope you all had a fantastic weekend. I wanted to share some tips of what should happen every month to ensure you get the best information from your systems.  This may be what your bookkeeper would do anyway, but it is worth knowing so you can ensure it happens!

  1. Ensure all sales invoices have been done and sent to the customers
  2. Apply all payments received from customers
  3. Send out customer statements
  4. Ensure all purchase bills have been raised
  5. Apply all payments made to purchases
  6. Reconcile your bank (with auto bank feeds this is easy to do!)
  7. Once all transactions are reconciled – ensure the statement balance in Xero and the actual bank statement are the same, just in case something was missed off on the direct feeds
  8. Reconcile the VAT (if you are VAT registered) – even if you are not submitting VAT this month, reconcile the VAT return back to your VAT control account
  9. Run through the balance sheet control accounts and make sure that prepayments have been expensed and accruals reversed if applicable
  10. Print your profit and loss reports and compare the results to prior months.
  11. Discuss with your mentor / bookkeeper / accountant if you have any questions

If you have any questions please don’t hesitate to get in touch:



Introducing The Cloud

Introducing ‘The Cloud’

When accounting systems first became popular, the business would require a server, someone to manage the server and all related IT and infrastructure functions, backups and end user support.

This was very costly and often businesses would lose months of work because the backups were failing and no one had noticed, or they had forgotten to take a backup offsite for safe keeping and the last successful backup was overwritten.  Sound familiar?

What does ‘the cloud’ mean I hear you ask!  You have to forgive me, as these acronyms and words roll off my tongue with ease, as it has been my life for a good twenty plus years!

In simple terms, what cloud technology allows you to do is to take advantage of someone else’s servers and someone else’s IT manager, and to have access to your information anywhere, anytime and on any device and saves you a lot of money by not having to have all the staff and infrastructure in house.

The cloud is fun and opens up numerous possibilities to help you provide the best service to your customers.

Here are some common problems with traditional desktop applications

  • Accounting information is only fully up-to-date on one machine (server)
  • Software must be upgraded regularly, often at a cost
  • The software is often licensed for use on one computer or per user
  • Using a USB drive to move data is inconvenient, unreliable and not secure – often small business do this to get their accounts over to the accountants
  • It can be difficult and slow to access financial data and customer details remotely
  • The software can be expensive to buy
  • Adding more users can cost a lot of money
  • The pricing may not be transparent, with hidden fees for updates or extra features

Now for the benefits of the cloud accounting software

  • Financial data flows automatically into the software from bank accounts and other sources
  • You can access accounts through any device with an internet connection
  • You have instant review of customer data and information, such as cash flow
  • There are many powerful tools and applications to help process accounting data
  • It’s easy for all the team to use
  • It grows with your business, no need to upgrade to the next version – expansion is not an issue
  • There are no more worries about outdated software, IT costs or server outages
  • You pay on a simple subscription basis, paying only for the services you need and services can be added and removed at any time

Basically, cloud accounting will give you fast access to the information you need to make smart business decisions from anywhere at any time.

The cloud really is the safest place for your accounts data.  I have to also add that the cloud is not just for accounting data. You can use cloud software for all your documents, such as word, excel, PowerPoint and more, and you can save your documents to the cloud, once again allowing you access anytime anywhere and on any device, provided there is internet connection.

Business moves really fast these days and having real time information is not only productive and efficient, your customers will love it and therefore you are likely to get repeat business due to an excellent service being provided.


Receipt Bank – the benefits

Managing your costs is probably one the most important things to do as a business owner (other than sales of course!) This blog post will cover the best way to work with your virtual bookkeeper using Receipt Bank to help manage your costs.

Getting your source documents sent digitally not only saves money on filing and printing costs, but also time.  Having your source documents attached to your transaction in your finance system (in my case Xero), means no more scrabbling around in files trying to find the original document.

What do I mean by source documents?  Source documents are the invoices, receipts or bills that your suppliers provide you with as proof of purchase. These contain important information, such as VAT (tax) information, date of the purchase and what has been purchased.

From now on I will refer to these various expense source documents as bills.

Most tax authorities require you to keep your receipts and invoices (bills) for up to ten years (check with your local tax authority to make sure you know what the time period that is required) as proof should you ever have the misfortune of having a tax inspection done.

Historically you had to keep files and files of these documents in your office.

Now with the cloud solutions you can store these electronically.  There are a number of ways you can do this, however I will focus on Receipt Bank and Xero, as those are the two main applications I use.  There are however many others, so do your research to find the one that works best for you. The principle will be the same no matter what packages you have decided to use.

Receipt Bank, as I mentioned previously, is an app that allows you to extract the key information from your bills, removing the need for manual data entry. Receipt Bank can then publish the data to your accounting software or it can be downloaded as a spreadsheet or used to create expense reports.

Receipt Bank has many ways in which you can upload your bills, take a picture using your smart phone or tablet app, scan and upload, email or use drop box to save your documents, receipt bank will then scan the drop box and upload all new documents. In addition, you can opt to post your receipts to Receipt Bank and they will upload them all for you!

Once the source document is in Receipt Bank, you can then see the document, code it to the correct expense, make sure the VAT is correct if applicable and then submit it to Xero (or your preferred finance system). So much quicker than manually keying in the transactions.

This document then gets created as a purchase bill in Xero and the document is attached, so at all times you can click on the document to see the original image.

This is very handy for accountants when they are preparing your final accounts too.  No more sending files and having to provide source documents for transactions they may query.

Receipt Bank can also be trained, so for example if you always buy your stationery from a certain supplier, you can setup a rule on that supplier in Receipt Bank, telling the system, which nominal code it should post to and what VAT rules are applicable and then set it to auto process.  Every time you upload a bill from this supplier it will just process straight through to Xero.

This saves so much time as you do not need to manually process these ones through, leaving only the anomalies or new suppliers to be manually coded and checked.

Receipt Bank can also be used to process expense claims for employees or directors for items purchased personally using the expense function.  So as you can see this is a really powerful tool to enable you to work efficiently and save time.

Receipt Bank can also be setup to recognise payment methods.  So for example if you paid cash, you can add a payment method called cash and when the bill processes through to Xero, it is automatically paid from petty cash, saving you having to manually apply a payment once it is in Xero.

Similarly, if you paid by your bank card, receipt bank can be setup to recognise that card ending with whatever the last four digits of your card are, goes as paid to the linked bank account.

This saves so much time for the bookkeeper and therefore costs you less as not so much time is required to do your books!

Once in Xero, the bookkeeper can match the items in the bank that are paid and then provide you with a listing of suppliers that need payment and the relevant payment due dates.

This is so important to help you manage your cash flow, as I mentioned earlier in the section about knowing your numbers.

In summary, your role as the business owner is to get the bills into receipt bank by any of the methods that works best for you.  The bookkeeper can then ensure everything is processed correctly for VAT (if applicable) and to the correct code being able to then provide an accurate and informative profit and loss statement for you.

Find out more about working with your virtual bookkeeper and using the cloud in my book

Making Tax Digital – are you ready?

Making Tax Digital – HMRC are committed to building a  transparent, more integrated and accessible tax system.  As at March 2015 the government set out the vision for a transformed tax system and the end of  current tax return.

Many small businesses already have access to their secure online tax account and digital accounts for taxpayers have been introduced this year.

By 2020, businesses and individuals will be able to register, file, pay and update their information 24/7.  No more waiting till the end of the financial year and getting a surprise tax bill.

The four foundations as per HMRC

Simplifying tax

Are you ready for Making Tax Digital?  

From April 2018, and phased in by 2020, businesses (initially unincorporated), including everyone who is self-employed and those letting out property, will update HMRC at least quarterly where it is their main source of income.

Don’t wait until the deadline, start getting organised now.  Trekim Online Accounting Services can help you get ready.  Whether you just need some help to get the systems in place and support managing it going forward, or if need bookkeeping help, we can partner with you to help you achieve this.

Click here to get the official document from HMRC