Financial administration

In this article we talk about financial administration. When you get started with your initiative or project, there is often money or funding involved. Then it is expected that you keep track of that in an administration. With financial administration you are able to account for income and expenses. As a private person, it is already very useful to keep your records and have a clear overview. If you really start doing things you are even required to do so. When the tax authorities ask for it, you have to be able to provide insight into the income and expenses you have incurred. The same applies when you have applied for grants or funds. This all sounds like a lot of hassle, but keeping financial records is often not that complicated. However, the more complex and larger your initiative or project is, the more complex and larger the administration will become.

Why do you keep records?

First of all, this is very convenient for yourself. You can keep track of how much money is coming in, how much you are spending on certain things and from whom you are still getting money. In this way you keep a grip on your business and have the right information available when you need to make decisions, for example about expenses. Moreover, you are often busy and sometimes forget things. The administration gives you the opportunity to retrieve what the agreements were again. The tax authorities also need to be able to determine how much tax you have to pay. In addition, they would like to have insight into how payments are made in order to make decisions about all kinds of matters relevant to you. Think about payroll taxes, VAT obligations, etc. In some cases, you may be asked by an external party to provide insight into your cash flows. This could be a fund or subsidizer, but also a co-producer or cooperation partner.

How do you keep financial records?

Basically, the form in which you keep your records is free. It may be that you prefer to work in Excel but you can also opt for a very comprehensive accounting package such as Exact. It is especially important that you find a system or package that suits you and works for you. Ultimately, administration is just like housekeeping; if you keep track of it properly, it's not that much work at all. So find a low-threshold system in which you can keep track of your receipts and invoices on a daily basis.

What specifically are you paying attention to?

When people go through your records, they should at least be able to get clarity on the following things:

• Incoming and outgoing invoices.
• Bank account transaction statements.
• Cash records and what happens to cash.
• Contracts and correspondence with partners.
• Timesheet.
• Travel administration for car and public transportation.
• Taxes (VAT and income).
• Closed model agreements
• Business correspondence such as quotations, appointments, etc.

The bottom line is that the tax authorities need to know what flows in and out of the business and under what conditions. In addition, the tax authorities look at how you spend your hours to assess how serious you are about your business. This affects your self-employment deduction, among other things.

Ask for help if needed!

A good accountant is definitely recommended. Because someone is watching you, you have peace of mind and security. In addition, a good accountant often pays for himself, because he thinks along about advantageous arrangements and solutions. It is best to involve the accountant in your administration from the beginning, so he can give you tips on how to organize it. In addition, the accountant can help prepare the annual accounts.

What happens if you don't keep records?

Then the tax authorities don't know exactly how much tax you have to pay and then they assume the highest possible amount for convenience. Also, you cannot claim certain schemes and benefits. In addition, you yourself miss overview and there is a chance that you never find out that someone does not pay your invoice to you, for example. Let's just say it's a very bad plan to leave your administration behind.

Interesting links

Are you convinced of the value of keeping records? Then take a look at the website of the Chamber of Commerce, for example. The Tax Office even has a whole handbook for entrepreneurship posted on their website for when you really want to delve into it.

Video lecture Cultuur+Ondernemen

Cultuur+Ondernemen has recorded a video lecture on this topic for the development program Slagkracht: "Steam Course in Finance. Watch it below and learn more about setting up finances, for example, things like the balance sheet, project budget and liquidity budget.

If, from your expertise, you yourself have knowledge that would fit this topic, or if you see opportunities to improve this text, we look forward to receiving your message at info@cultuuracademy.nl.