The COVID-19 pandemic has had severe repercussions on every aspect of our lives, from our social and personal relationships to the ways in which we work. Bookkeeping is no different, and there are aspects to consider in 2021 and beyond that might not have occurred prior to the coronavirus pandemic.
For people who run their own businesses, or manage a team, there are new considerations to take into account, and this can leave you scrabbling for time when it comes to doing your own bookkeeping. For added reassurance, you might look to hire a bookkeeping professional to keep on top of these new changes, challenges, and opportunities.
Below, we highlight three key changes to bookkeeping since the pandemic.
Working from home
With more people working from home since the beginning of the pandemic, there are some tax considerations that are worth knowing about with regard to this method of working. Your employees can usually (depending upon your government’s policies) claim some expenses for carrying out work duties from home, as long as they’re only claiming for things used during the usual working day.
In some countries, a flat fee for salaried workers can be paid by the employer, tax-free, to compensate for things like heating, water, and electricity use. These would generally be expenses that are increased by the employee working from home.
Hiring a bookkeeping service to navigate the payment methods and documentation of this can potentially reduce your tax bills whilst also saving you and your employees time. Bookkeepers in 2021 are well versed in how to deal with the working from home tax deductions and can usually advise your employees on how to declare it on their tax forms.
Supplies for home offices
Some supplies may also be claimed tax-free, but even if this is not the case you may feel that providing your employees with an allowance to set up a home office is in your best interests.
This means your staff will have somewhere comfortable to work, with a reliable internet connection and phone line. Many employers have decided that the extra immediate cost is worth the return in employee loyalty, wellbeing and productivity, and sometimes these costs can even be offset by the savings made by forgoing larger office spaces.
In terms of stationery and other sundries, your bookkeeping service may find that it is most cost-effective to buy in bulk and provide these supplies to your staff. Or it may be worth setting up an account with an online retailer to keep all expenses in one place. The benefit of having a bookkeeping professional on the team is that they are in the know when it comes to deciding how and where to spend money to the best advantage.
Re-evaluate the office space
The more employees you have working from home, the less important it will be to have an office space big enough to accommodate them at the same time. Many successful companies have a hot desking policy, which shakes the office up enough to keep creativity flowing and helps your employees create connections between everyone on their team.
Large, city centre offices may also become a thing of the past, with many desk-based workers expected to give up lengthy commutes post-Covid. By choosing to relocate to a spacious, bright workspace that is easier for your staff to travel to, you may find you save money and increase the likelihood of retaining your best workers.
A bookkeeper will be able to look at your monthly and end-of-year figures and work out how much could be saved by such a move. They will also be able to help you plan based on local tax rates and rents, and advise on other financial aspects relating to any changes.
Many things have shifted due to the global pandemic, and with them comes the opportunity to rebuild better. By working with a trustworthy, knowledgeable bookkeeping expert, your company may find a unique, novel way of pivoting to something more flexible, that offers your team a degree of independence and can even save you money in the long run.
This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation, please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your circumstances.