Every business generates paperwork. Nowadays a lot of that paperwork is virtual, but it still exists. You might find it easier to keep Excel spreadsheets with your records, income and expenditure all recorded and ready to send to your accountant every year, but those records still exist.
When you have VAT to think about as well, it makes sense to ensure you start tackling those records in the right way. The way you do this might depend on how you currently do your accounts. You’ll need to find the easiest possible way to start doing these records as well. While the main tax return needs to be done annually, your VAT returns need to be done every three months. This means you must get more organised – especially if you don’t worry too much about getting your accounts in order until the eleventh hour when your tax return submission is due.
Three months might sound like a long time but it soon flies by. That’s why it makes sense to ensure you have everything you need in order throughout each period of time. Keeping your records in order and updating them little and often means you can keep everything up to date and that puts less stress on you.
We’ve spoken before about the need to become more knowledgeable about VAT and how it affects your business prior to actually registering for it. If you are doing it voluntarily you will know how this can affect you. However if you are registering because your business is doing well and it has gone over the threshold you can enjoy an easier transition if you are prepared.
This is also a great time to think about changing your approach to your paperwork if you’re not happy with how it is at the moment. There is little point in adding on another requirement as well, because it makes it even harder to change things later on. If you have time before registering for VAT, why not look round and see if there is a software program or other system you could use instead of how you do things at the moment?
As you can see there is a lot to think about here. VAT overwhelms most people the first time they really think about it in a business sense. Getting some advice from your accountant is a good way to begin. However there is a lot you can do on your own. You’ll know how familiar you are with your current accounting system. Now is the time to make sure you have the habits in place that will make the transition to VAT a lot easier to deal with. It might seem strange to start with but you will soon settle into your new habits.