What is bookkeeping?
Bookkeeping is the recording of financial transactions for a business.
Financial transactions include receiving income from selling goods or services and expenses incurred in producing those goods or services and any other associated costs incurred in running your business.
All business related financial transactions need to be recorded accurately as they must be reported at the end of each trading year to HMRC whether you are a sole trader, a partnership or a limited company. Limited companies must also submit their annual accounts to Companies House.
A bookkeeper will keep your accounts information accurate and up to date and will produce regular information for you which will tell you:
- Which customers have not paid
- Which suppliers you owe
- Which income stream is most profitable for you
- How much you are spending on overheads and can itemise these costs
A bookkeeper will also be very experienced in completing VAT returns and will be able to:
- Record your purchases with the correct VAT treatment
- Prepare and submit VAT returns monthly or quarterly
- Register or de-register you for VAT
- Deal with HMRC as your VAT agent if needed
- Advise you on any changes to VAT which are relevant to you
- Ensure you are using the most suitable VAT scheme for your business
A bookkeeper will also provide you with accurate and up to date management information which will help you to make informed business decisions.