If you are running a successful business you will be interested in the following:
- What is my turnover to date?
- What do people owe me?
- Am I making a profit?
- Can I take any dividends from the business and how much?
- How much tax will I owe?
- How much do I owe my suppliers and when do I need to pay them?
- What is the most tax efficient way to pay myself from the business?
These are questions that we are frequently asked and can only be effectively answered if your bookkeeping is up to date. Many business owners think bookkeeping is a dreaded chore, but if you understand and efficiently use the data your bookkeeper collects, bookkeeping can be your best ally.
By recording all the daily/weekly/monthly goings on in the business and keeping records up to date, the vital information that a business owner needs will then be readily available to make informed decisions.
What does a bookkeeper do?
The frequency and volume of a bookkeeper’s duties will typically depend on how many daily/weekly/monthly transactions a business has going on and through its bank statement. The bookkeeper will:
- Process payments and receipts
- Draw up sales and purchase invoices
- Record transactions such as income and outgoings and posting them to the various accounts
- Produce financial reports
- Reconcile third-party records and bank statements.
All the above is done on a regular basis so that fundamental information is available all the time and up to date.
How does a bookkeeper help my business?
- Helps you budget accurately
With your income and expenses properly organised, it is simple to review your financial resources and costs. It is a lot harder to get an accurate budget if your records are not accurate and up to, your budget will be mainly guesswork.
2. Keeps you prepared for tax
You’ll be able to predict how much your year-end tax liability will be, well in advance, which will help to ensure you have the cash to pay for it. Your tax returns are more likely to be delivered on time as most of the accounting work has already been done months before your returns are due.
3. Maintain accurate and organised records
By doing your books often, staying on top of them and not leaving it to the last minute, over time, you will find it easier to retrieve the bits of information you desperately need in no time. The last thing any business owner wants to do is look for documentation and information regarding a transaction that happened months ago!
4. Easier to see business targets
With no accurate number or data to analyse, it’s not easy to set yourself any growth goals. Every business wants to grow, but poor financial records can hinder that from happening at the speed you want.
5. Meeting government Regulations
The government’s Making Tax Digital initiative requires businesses to submit their taxes digitally through the use of applications and software. It is a lot easier to keep these records up to date than to have a whole years’ worth of data entry to do within a short amount of time.
6. Peace of mind
Unorganised books and looming deadlines causes too much unnecessary stress and anxiety when there is a long list of other jobs to do with running the business. If your books are neat and tidy you won’t be losing sleep at night worrying about HMRC obligations.
Bookkeeping is crucial for a business for many reasons. The time it takes to complete the bookkeeping will depend on the volume of transactions on daily/weekly/monthly basis which will in turn determine how much a bookkeeper will charge to do the work.
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