Although there are many people who will be happy to take your bookkeeping off of your hands, the professional bookkeeper or accountant to name but two, there is a strong argument for keeping this important part of business in-house and doing it for yourself. It will, no doubt, save you money to do your own books, as bookkeepers, quite rightly expect to earn a decent living from their skills and most accountants will charge a premium for taking on this administrative task, but thrift is not the only reason for doing your own books.
Bookkeeping is nothing more than keeping the financial records of your business; knowing what is happening with your venture on a day-to-day financial level is one of the most important keys to business success and will allow you to stay ahead of the game.
It does not have to be difficult or complicated if you choose to keep your own business’ financial records, providing you remember a few basic rules:
• Records need to be maintained very regularly; one cannot miss a day’s bookkeeping because of a busy schedule; keeping your own books will take a chunk of your time, but it will also allow you a clearer insight into your business’ fiscal health.
• Consider using specialist software to assist your record keeping as most modern packages provide much of the information you will need to keep accurate records. Alternatively, a simple spreadsheet will be very effective; keeping your books electronically provides better security and a clearer, more easily accessible set of records, so is always preferable to a paper ledger. learn additional tips here!
• Keeping everything clean, clear, tidy and presentable will help you to access everything you need more quickly; all invoices, check stubs, and receipts need to be carefully filed and stored safely for the time when they are needed.
• It is important to cross check all of your records against those of your bank each month; doing this will throw up any inconsistencies or errors before they have a chance to continue unchecked; reviewing what is happening monthly is never a bad idea anyway as it will enable you to notice any potential difficulties well in advance.
Getting a heads-up on any potential problems is one of the best reasons for becoming your own bookkeeper, as well-kept records will enable you to forecast all sorts of pertinent financial things, not least how much tax you are likely to have to pay.
If you have a set of records that give a clear picture of your business’ recent financial history, and present the facts in an accessible way, when the authorities ask to see them, at a tax inspection or investigation, things are more likely to go smoothly for you. Abdicating responsibility by handing everything over to a third-party such as an accountant is unfortunately not enough of an excuse to get you out of hot water if there are problems; it is the view of HMRC that business owners should have a handle on their own company’s finances and they have a valid point; far better perhaps to keep everything under your own control so that you can always know what, for better or worse, is going on.
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