Everybody needs a holiday, even business owners. If you’re the owner of a business with employees, it may be easier to take a few days off than if you’re a sole trader or freelancer, in which case you’ll need to do a little more planning.
Aside from working out how to cope with and making up for lost income, it’s also a good idea to give some thought to bookkeeping and how to make sure you don’t have a massive catching up task on your return.
Bring everything up to Date
It’s important not to fall behind with bookkeeping as this can quickly lead to mountains of muddle. Before going on holiday make sure the books are bang up to the date, and organise some automation if possible.
Things you can automate include setting up your online accounting software to automatically include daily bank fees. If you do this, you can see at a glance which invoices are outstanding without letting things pile up until you’re back home. Internet banking is another way to check the finances are ticking over in your absence.
Delegate Bookkeeping Tasks
Unless you’re a freelancer working on your own, delegate the bookkeeping to a colleague while you’re away. Plan this well in advance so you can begin training if necessary.
By getting someone to do some basic updating and maintenance on the books while you’re away, the catch-up when you return will be less cumbersome. It’s also a good idea to create a personal accounting manual for whoever takes over to refer to. A few screen shots and some written step-by-step instructions would be an invaluable guideline that could save you some unwanted phone calls during your holiday. Simply concentrate on the key things, such as filing receipts, updating income and expense, or paying invoices.
Consider which types of transaction will arise while you’re away and make sure your stand-in knows how to deal with it. This will vary depending on the size and model of the business.
When holidays are a regular feature in your life, consider hiring a professional bookkeeper who will automatically keep things ticking over in your absence.
When Mixing Business with Pleasure
Planning a holiday itinerary is fun, and sometimes it’s possible to mix business with pleasure and still claim some expenses back. Circumstances and reasons have to be taken into account. Because you can’t claim for everything, familiarise yourself with what’s allowed before you go, then concentrate on keeping just those records for your bookkeeping when you get back.
An example of what is allowed would be a trip where you can clearly separate the business expense from the personal. If, for instance, the main reason you’re travelling is to visit a client, you can claim your travel expenses even if you decide to extend your stay once business is concluded.
You can’t, however, claim expenses incurred due to your overstay.
So, if you’re travelling by train and intend to stay in the client’s town for two days while you do business, you can claim those train expenses, both ways, against the business. If you decide to travel a bit further however, maybe to visit the nearby coast on the third day, you can’t claim the additional travel expenses.
Hotel expenses are treated the same way. A two night hotel stay while in town doing business is allowed. A third night while you go the theatre is not.
When it’s harder to separate business and personal expenses, the rules about claiming expenses become trickier, and in these instances professional advice from an accountant may prove invaluable.