What is Bookkeeping?
Bookkeeping is the process of accurately recording and organising the financial transactions of a business. It gives you a clear record of the money coming into your business, the money going out and what your business owes or is owed.
Good business bookkeeping helps you understand your finances, meet your reporting obligations and make better-informed decisions about your business.
What Does a Bookkeeper Do?
A bookkeeper records and maintains the day-to-day financial information your business generates.
This can include sales and income, purchases, business expenses, payments to suppliers, money received from customers and other financial transactions.
Expert bookkeepers make sure this information is recorded accurately and kept up to date, giving you a much clearer picture of your business finances throughout the year.
Why is Bookkeeping Important?
Accurate bookkeeping isn't simply about keeping records for your year-end accounts. It can help you understand how your business is performing right now.
Up-to-date bookkeeping can show you:
- which customers still owe you money
- how much you owe suppliers
- where your business is generating the most income
- how much you are spending on overheads and other costs
- how your income and expenditure are changing over time
Having this information readily available can make it much easier to manage cash flow, plan ahead and make informed business decisions.
Bookkeeping and Your Business Records
Businesses need to maintain appropriate financial records so that income, expenses and other relevant transactions can be correctly reported.
The exact requirements will depend on how your business operates and whether you are a sole trader, partnership or limited company.
Limited companies also have additional accounting and reporting responsibilities, including filing annual accounts with Companies House.
Working with experienced bookkeepers can help ensure your financial records remain organised, accurate and ready when they are needed.
Can a Bookkeeper Help With VAT?
Yes. Bookkeepers can play an important role in maintaining the records required for VAT and preparing accurate VAT returns.
Depending on the support you require, a bookkeeper may help you:
- record purchases and sales with the appropriate VAT treatment
- prepare and submit monthly or quarterly VAT returns
- register or deregister your business for VAT
- deal with HMRC as an authorised VAT agent
- understand VAT changes that could affect your business
- identify an appropriate VAT scheme for your circumstances
Keeping your bookkeeping up to date throughout the VAT period can make preparing your VAT return much simpler.
Can a Bookkeeper Help With Making Tax Digital (MTD)?
Yes. Experienced bookkeepers can help you meet your Making Tax Digital (MTD) requirements by keeping your financial records accurate, organised and up to date using compatible bookkeeping software.
With MTD for Income Tax being introduced for eligible sole traders and landlords, keeping digital records and submitting information to HMRC through compatible software is becoming increasingly important. Our bookkeepers can help with MTD bookkeeping, including setting up and maintaining digital records, keeping transactions up to date, using MTD-compatible software such as Xero, and helping you stay on top of the information that needs to be submitted to HMRC.
Not sure if MTD applies to you? Talk to our friendly bookkeeping team and find out how we can help you get your records MTD-ready.
More Than Just Recording Transactions
Good business bookkeeping turns your day-to-day financial transactions into useful information.
Regular, accurate records can help you see how your business is performing, identify potential problems earlier and understand where your money is going.
An expert bookkeeper can also provide regular financial information that helps you make decisions based on current figures rather than waiting until your year-end accounts are prepared.
