Every business, from large multinational companies to small independent cafes, needs to practise effective bookkeeping if it’s going to succeed. 

While bookkeeping and accounting are often confused, they are different. Accounting is about long term financial strategy and management, whereas bookkeeping specifically refers to the process of recording your business’ financial information.  

In other words, bookkeeping is a small but essential part of accounting. So, if you want your accounting strategy to work, good bookkeeping is a necessary starting point. 

With that in mind, let’s take a look at some bookkeeping tips for small cafes. We’ll cover these areas: 

  • Opening a business current account
  • Invoicing
  • Recording expenses
  • Preparing for taxes
  • Cash flow insights
  • Profit and loss statements

Opening a business current account

Bookkeeping is always easier when you separate your business finances from your personal ones. By opening a business current account, you won’t have to pick your business expenses and earnings out of a bunch of personal transactions. As a result, you can update your records quicker with a lower risk of errors.  

Recording expenses

As a business owner, you’ll be responsible for recording and preparing all of your financial information for taxes. You need to record all of your income and expenses throughout the year, then sort them into the right categories and report them to HMRC. 

You need to get this right if you’re going to pay the right amount of tax and claim the right amount of relief on business expenses

Doing this can take a lot of time and effort, but it’s a lot easier with the Countingup app.

The Countingup app’s automatic expense categorisation and receipt capture tool make it simple to keep an accurate, digital record of your business expenses. Just take a picture of any receipt, and it’ll be automatically stored on the app and categorised into HMRC approved expenses categories. 

Recording expenses on the go will reduce your chances of making mistakes and save you loads of time over the year. For more information about this feature, click here

Preparing for taxes

You need to keep accurate records if you’re going to pay the right amount of tax. But good bookkeeping can also help you make accurate estimates about exactly how much you’ll have to pay based on your income and expenses. 

The Countingup app will show you tax estimates all year round so there won’t be any nasty surprises at the end of the year.  

On top of that, you can even use the app to pay VAT tax through HMRC’s Making Tax Digital (MTD) service.

Cash flow insights

One of the main reasons good bookkeeping is important is to keep track of your cash flow. 

Cash flow is the term used to describe the actual money moving in and out of your account. Without sufficient cash flow, you’ll struggle to keep up with ongoing payments like wages, rent, and subscriptions, so tracking it is crucial for ongoing financial health.

Countingup is currently the only business current account that lets you view your cash flow in real-time. It shows you exactly how much cash is in your account at any given time. There’s no data lag, so you’ll get the most recent, accurate information possible. 

Invoicing

As a small cafe, most of your income will be through cash or bank transfer. That said, there are still plenty of reasons for invoicing. 

For example, you might hire out your space for an event, rent out your equipment, offer training classes, or have an open-ended account for a regular group of customers. 

When you do, you may need to create invoices in order to receive payment. An invoice is essentially just a bill for an agreed amount that includes payment terms. It’s fairly simple in theory, the only tedious part is creating and recording them.   

To make things easier on yourself, you can use an accounting software app, like Countingup’s, which can do most of the work for you. It’s a business current account with built-in accounting software that you can use via a handy app.  

With the Countingup app, you can: 

  • Create an unlimited number of customised invoices.
  • Add a logo to invoice templates.
  • Send invoices to customers.
  • Receive a notification when an invoice is paid.
  • Match a payment to an invoice.
  • Duplicate an invoice.
  • Change an invoice’s due date.

Click here for more information about how it works. 

Profit and loss statements

A profit and loss statement is a financial report that shows all your ingoings and outgoings. It’ll show you your net income and if you’ve made or lost money over a period of time.

Accurate profit and loss statements are a crucial part of good bookkeeping for a number of reasons:

  • You can see how your business is performing over time.
  • You can see how your business decisions impact your profits.  
  • You’ll need to record your profits and losses when submitting a tax return.
  • You have evidence of the financial state of your business that can be used when applying for loans or looking for investors. 

Instead of manually recording data yourself, the Countingup app can automatically generate profit and loss statements based on your monthly income and outgoings. 

Simplify your bookkeeping with Countingup

Financial management can be stressful and time-consuming when you’re self-employed. That’s why thousands of business owners use the Countingup app to make their bookkeeping easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.

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