2023: The Year To Switch To Real-Time Record-Keeping

Every year, sole traders have to deal with their finances and do their accounts. As you know, this can be a lengthy process that takes up valuable time. But in today’s technical world, it doesn’t have to be that way.

With real-time record-keeping, you can access and track your financial information virtually anywhere with an internet connection. By keeping track of your income and expenses as they occur, you’ll be able to better understand your total revenue and profit – and better plan for the future of your business.

To help you discover the main benefits of real-time record-keeping, we’ve provided the following guide…

Prepare for tax deadlines

As a self-employed individual, managing your taxes and keeping on top of deadlines is a year-round priority. That doesn’t mean it should take time away from other important matters though.

One of the biggest advantages to real-time record-keeping software is that it allows you to rapidly gather all of your financial information for filling out various tax return pages. You don’t have to worry about missing an important tax deadline either, as these duties are typically dealt with through the use of automation or routine reminders.

Similarly, if you already have all of your invoices prepared, you can send them out as soon as work is complete, get paid faster, and have that income information go straight to your tax return. This means you can then submit that tax return earlier, ensuring you never miss a deadline and know what your tax bill will be well in advance.

Our invoicing module allows you to transform your existing Word and Excel invoices into well-designed ones. Once they’ve been paid and you’ve added your expenses, your GoSimpleTax account will be updated automatically so that you can swiftly submit your tax return to HMRC.

Analyse your expenditure

There’s no denying that manually keeping on top of your cash is tricky business, but by using real-time software, you can instantly keep track of your transactions.

The best software will enable you to view how much you are spending on your business as it is being spent. That means you won’t have to fret about missing a transaction or two when it comes to calculating your revenue and profits.

Likewise, real-time software can help eliminate common human errors for accurate record-keeping too. Without using correct, up-to-date information, you risk making poor financial decisions for your business. You also run the risk of being fined by HMRC for an inaccurate tax return.

Another way that real-time record-keeping software can help save a considerable amount of money for your business is through budgeting and forecasting. With these tools, you can forecast your expenditure for the next year, showing you how much profit your business should make. This will enable you to plan for any cash flow problems well in advance.

GoSimpleTax Invoicing also allows you to log your expenditure. This information can then be used to reduce your tax bill when you file your tax return, allowing you to save money for the future of your business.

Claim tax relief

If you’re self-employed, there are several costs you can claim as allowable expenses. These include travel, uniforms and office costs – costs that can typically add up to a significant amount.

Some other expenses you can claim that you might not be aware of include:

• Accountancy, legal and professional fees – The cost of hiring an accountant, solicitor, architect or surveyor for business reasons can count as an allowable business expense. You can also claim costs for professional indemnity insurance premiums, allowing you to save money on the expense of covering your business.
• Office computer – If you frequently use a computer for your business, you can deduct an appropriate percentage for business use when calculating your taxable profit. You can even claim expenses for computer software if you regularly renew the licence, or for software your business uses for less than two years.
• Training courses – Training courses that help improve the knowledge and skill you use in your business can be claimed as an allowable business expense. That being said, you can’t claim for training courses that help you start a new business or expand an existing one. The training courses must also be related to your business.
• Advertising and marketing – Advertising (such as newspaper ads or directories, free samples, bulk mail advertising and website costs) can be claimed on. You can’t claim for the cost of entertaining clients, customers and suppliers.
• Working from home – If you often work from home, you can claim allowable expenses based on the hours you work each month. At the lowest rate, if you work from home for 25 to 50 hours per month, you’ll be able to claim a flat rate of £10 per month.

As you log this expenditure, GoSimpleTax will flag it as an allowable expense and alert you, helping you maximise how much money you actually take home.

Take control of your finances with GoSimpleTax

If you want to take managing your money to another level, GoSimpleTax Invoicing is for you. Our invoicing module allows you to promptly create, send and settle invoices, as well as log income and expenditure. This information is then sent directly to your GoSimpleTax account.

Check out our comprehensive support centre for step-by-step how-to’s.

Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.