Small Business Administration: Your Simple Guide to Managing Your Administration

Small Business Administration: Your Simple Guide to Managing Your Administration

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Let’s face it: you didn’t start a business because you have a passion for paperwork (unless you have a passion for it and your business helps people manage their paperwork…).

Still, small business management is an essential part of running a business and can have a real impact on your profitability.

A study conducted by Sage in 2020 found that only 42% of homeowners claim they have always taken good care of their money.

This is proof that even if you’re afraid of small business management right now, with a little time and patience, you can learn to deal with it.

That’s why we’ve put together this simple guide to business administration to demystify the processes you need to think about.

We can’t promise that you’ll enjoy business tasks, but you may find them a little less painful.

The following is covered in the article:

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The term “small business administration” refers to a variety of record-keeping tasks that businesses must complete.

At the most basic level, business administration is about keeping track of the money coming in and out of the business and keeping records in the form of invoices, receipts and bank statements.

Some of these tasks are legally required for you as an entrepreneur.

You must keep records of income and expenses and are also required to pay your taxes to HMRC each year. Otherwise, fines may be imposed.

Other business administration tasks are not mandatory, but can help your business run more efficiently.

If you’re afraid of filling out forms and dreading spreadsheets, remember that the administrator is your friend (and it’s possible to use small business software to automate some of your tasks, saving you time).

Here are some of the benefits of completing business tasks on time:

  • Shows you how the company is doing (including how much you’re making).
  • Helps you make better decisions.
  • Indicates whether you are getting value for money from suppliers.
  • This means you reduce the risk of legal problems for small businesses.
  • See which products/services or are not Sale.

Here’s everything you need to know about paperwork for a small business.

Make an appointment with yourself to complete the various administrative tasks you need to complete. Although it might be tempting to put these tasks off until later, doing administrative tasks frequently will save you more time in the long run.

Use your schedule to remind yourself when you need to complete certain tasks and make time for each of those tasks. Different tasks should be completed daily, weekly, monthly or yearly.

With practice, you will complete tasks much more quickly and administration will soon become part of your routine.

Take about 20 minutes each day to complete a few simple administrative tasks. This includes things like:

  • Check your business bank account: Note which customers have paid bills and monitor your spending from one day to the next. If you use accounting software, the technology can automatically track this for you and remind you of overdue invoices.
  • Recording costs: Try to write down all the payments you make every day and keep your receipts in a safe place (preferably digital). Doing this daily will keep it fresh in your mind, making it easy to remember what you bought. Record this information in a simple spreadsheet, write it in a book, or use accounting software to track it.

Other small business administrative tasks should be completed weekly. You may want to set aside a morning each week for tasks such as:

  • Paying suppliers: Paying your bills regularly will prevent them from piling up.
  • Track invoices: Every week, check which customer invoices are overdue and send a reminder email to the customer.
  • Record data on a digital system: If you do your day-to-day bookkeeping using a paper-based system, take some time to record all of this information in a spreadsheet. When you use accounting software, all of this information is uploaded and stored securely and you never have to worry about your files being lost.

Try to set aside one day each month for larger business processes, such as:

  • Send invoices: If you don’t send invoices, you won’t receive any money. By accurately invoicing on the same day every month, you won’t forget to invoice for work done in the past.
  • Billing runs: If you are a limited company you will (usually) have to pay yourself monthly. The same applies to your employees.
  • Reconciliation: Bank reconciliation involves matching income/expenses on your business bank statement with invoices/receipts so that you have an overview of the amounts paid.
  • Manage inventory: A monthly inventory will show you what inventory you have in stock and what is selling and what isn’t.
  • Administrative audit: It’s worth taking some time each month to check in on how the company is doing. Are you turning over enough money? This can then be used to optimize your wider business strategy.
  • Performance review and planning: It’s helpful to spend one day a month reviewing business performance and then making plans and forecasts for the future. By looking at the information you’ve collected over the last month, you can spot seasonal trends, identify which customers are most valuable to you, and decide if there are any products or services that just aren’t worth it for you.

Finally, there are several processes and procedures that you must complete every year. Take at least a day or two to complete these tasks:

  • Self-assessment (if you are a sole proprietor): The deadline for filing your tax returns is January 31 after the end of the previous tax year. You must also pay your tax bill by this date. For example, for the tax year that runs from April 6, 2020 to April 5, 2021, you must file your tax return digitally by January 31, 2022 and also make your payment within this deadline.
  • Filing of accounts and corporate tax return (if you are a limited company): The deadlines for this depend on when your financial year ends and when you registered as a company.
  • Rating insurance: If you have business insurance, check your annual premiums and shop around for better deals.

You are required by law to keep records of your company’s activities. In the simplest case, you need to write down all of this information on paper or use a spreadsheet.

But many companies today prefer digital recording because it is faster and more secure:

Accounting software

You may want to use accounting software for your bookkeeping. This can automatically handle additional small business administrative tasks for you.

You have to pay for these services, but they make administrative tasks much faster.

Accounting software can save a lot of time when organizing documents, ensure your records are kept safe, and ensure everything is stored digitally, making searches much easier.

Cash book

You can find cash books in every stationery store. You simply record all sales and expenses every day.

Keep receipts

You can store paper receipts in a folder or shoebox. You will then need to hand these receipts over to your accountant, which can be time-consuming (and there is always the risk of losing them).

Nowadays, most business owners prefer to photograph or scan their receipts and store them digitally. This makes searching easier – and reduces the risk of something getting lost.

The cloud vs. local storage

If you’re thinking about organizing small business files, you can store your invoices, receipts, and business records on your own computer or use the cloud.

The cloud is basically a way to store your files in a large data center. You upload all your files over the Internet instead of storing them on your own computer.

The advantage is that even if you lose your personal computer, all your documents are stored safely online. Cloud storage typically costs a small fee each month, depending on which package you choose.

Spreadsheets

You’re probably familiar with programs like Microsoft Excel or Google Sheets. There are plenty of easy-to-use business management spreadsheet templates online that you can use to record your income and expenses.

Although they can be useful, spreadsheets have their challenges when it comes to accuracy and manual data entry.

Many small business owners simply don’t have the time or inclination to take care of all the administrative work. And that’s exactly why you might hire someone else to do it for you.

Here are a few things you can try:

Hire a part-time administrator

Experienced administrators and virtual assistants can manage all your administrative tasks and find ways to run your business more efficiently.

Hire an accountant or accountant

Accountants and small business bookkeepers are also able to handle many of your administrative tasks and ensure everything is done correctly and properly for HMRC.

You can also offer business advice.

At first glance, these administrative tasks seem like a lot for small businesses. But with a little practice (and the use of software), they quickly become second nature and can be completed in no time.

Try our Business Readiness Quiz today for more personalized advice on starting and running your small business.

Editor’s Note: This article was first published in April 2021 and has been updated for relevance.

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