Bookkeeping as a landlord doesn’t need to be complicated or overwhelming. We know you want to save time on doing your books and filing tax returns, so we made a list of tips on how to best stay organised and keep HMRC happy when you’re running a property business.
Avoid “a box” of receipts.
Keep everything organised and when it comes to the end of the tax year, you won’t be fishing through a mountain of paper or digital documents. This can be as simple as setting up separate folders on your computer, numbering invoices and dating receipts.
If you are dealing with physical copies and receipts, make sure you have a dedicated place to put them, and preferably a system for organising them. Most digital accounting software has the ability to upload photos of receipts, but it’s always a good idea to file them in a physical folder.
Check in regularly.
Updating your books regularly saves you a lot of time in the long run.
Dedicate an hour a week or a fortnight, where you go through all your payments and update everything. Regular updates not only save you time but is more effective as you are less likely to forget about a purchase from last week compared to an expense from six months ago.
Set up a business bank account.
This is essential and often overlooked by landlords. In any situation where you are earning money for business and personal use, you should have two separate bank accounts.
Having a business account means that all your income and outgoings are all in one place, which can make it extremely easier to track payments.
There’s also never any confusion when it comes to whether a purchase was for business or personal use either. It also keeps any of your personal income away from the business too.
Keep your files safe.
Back up everything.
Imagine, looking after your books all year round for you to lose them right towards the end of the year due to you spilling coffee on your laptop, or accidentally deleting a file.
Invest in a proper backup system, or alternatively make sure you’re storing files on your bookkeeping software as well as a cloud-based storage system like OneDrive, Dropbox or Google Drive.
Invest in digital accounting software.
There are many reasons why businesses are making the switch to digital accounting software. Digitising your bookkeeping system saves time and makes sure everything you need is in one place.
If you would like any more advice on bookkeeping or filing your tax return as a landlord, please contact a member of the VSP team today – we’d be happy to help.