Bookkeeping is vital to keep good records of your financial affairs in your business. Bookkeeping is the recording, on a day-to-day basis, of the financial transactions occurring in your business. It is also important that they are presented clearly as well as being up-to-date and accurate, as they are subject to inspection for your taxes. By setting out your approach in advance and continuing to keep the books up-to-date, you refrain from complications at the end of the year. When starting good bookkeeping, it is essential you keep all relevant documents from purchases and sales, again making it easier to do it as you go along, instead of having a big build up. An accountant could do this for you, but you could save yourself big costs by being organised and being in control of your own finances. There are numerous ways you can go about your bookkeeping, this will provide you with a few alternatives, to discover what will work best for your business.
Although attractive to leave it to someone else, it is not cost-effective. The accountant will have experience, so you can ensure accuracy, however, you will be paying for them to input the data, of which you could easily learn. However, this is a useful option if you have limited time, for example, trying to develop your business and needing to dedicate time to other tasks. This method does take away the laborious task of inputting all the data, however, you will still need to provide the evidence, for example; receipts, invoices and sales summaries. The better organised these are, the less time you will need to pay towards the accountancy fees.
Computer software can be useful for small businesses and individuals who only have a basic understanding of financial accounting. This kind of software enables you to record income, expenses and automatic bank reconciliation to make the debits and credits equal. There are numerous different systems available, with various degrees of cost. One we recommend is VT. Another good example is Cashbook, but this is for more experienced users.
Full Accounting System
An accounting system is used to manage all the bookkeeping needs, in a simple, easy-to-use fashion. This is an automated system that uses specialised software to generate comprehensive statistical reports that aid the decision-making process. This, therefore, goes beyond the regular data inputting from which an owner makes decisions, to help those decisions being made. However, they are complex programs and you need to be properly trained to use them, in order to avoid mistakes. These types of software are therefore appropriate for bigger businesses.
As mentioned, there is a variety of different methods available for bookkeeping and choosing the appropriate one for your business can be difficult. It is important to decide how much time you have to do it yourself, how much expense you are willing to pay out and your competency. To find out more information about the different methods, visit our page on Bookkeeping, or visit our contact page to get more information. We are a local accountancy firm in Milton Keynes, dedicated to our clients, specialising in bookkeeping services for small businesses, therefore, we have plenty to offer.