What is bookkeeping, and why do you need to do it?

Simply put, bookkeeping is the process of keeping track of a company's financial transactions. Sales, purchases, receipts, and transfers are also examples of transactions. They could be created by or for another company or entity, or they could be produced by accounting softwares.

But, what happened to the tape? After a bookkeeper creates the record, it is handed off to chartered accountants in London, who will compile financial statements and then file the financial records that HMRC and other government bodies need for tax returns and VAT.

Financial transactions can be recorded in a variety of ways, ranging from basic processes like single-entry bookkeeping to more complex schemes like double-entry bookkeeping. A bookkeeper or accountant uses the documents to compile a revenue and expense account to see if the company is profitable and to better control cash flow, regardless of the process they use.

What exactly is a bookkeeper?

A bookkeeper is someone who keeps track of an organization's financial statements on a daily basis.

Accountancy companies also hire bookkeepers to keep track of their clients' books and may provide cheap bookkeeping services in London as part of their overall package.

In this setup, the bookkeeper is responsible for maintaining financial documents, preparing the VAT Return, and preparing a series of quarterly management accounts.

Often companies hire an accountant to file their year-end financial statements and calculate Corporation Tax. The accountant's bill would also be much cheaper if the books have been properly kept by an accomplished, professional bookkeeper. There will be no need for verification and verifying if the accountant is sure that the accounts are correct.

Is it possible for me to do my own bookkeeping?

Many small firms do their own bookkeeping. They keep track of their profits and expenses on a spreadsheet. This can take a long time, and it's easy to make mistakes.

Why do I have to keep track of my books?

Small businessmen and sole merchants, too, must hire cheap small business accountants to keep track of their books to ensure that they have a complete record of their financial transactions.

Your company bank statements must be reconciled properly so that you can be sure that all of your transfers have been registered, that none have been lost, that all of your clients have paid you, and that you are paying your vendors on time.

A well-kept collection of books allows you to determine whether or not your company is profitable. If your expenses outweigh your profits, your company is losing money.

When a company continues to lose money, you must decide how long you will finance it and if it has a long-term future.

Alternatively, bookkeeping may demonstrate how profitable a company is; if the business is profitable, you will continue to spend more money to grow it.

The legal duty to pay all taxes owed is, of course, the key reason small business owners ought to keep reliable books. If you don't keep proper records, your reports can not be accurate, which may result in false tax refunds and fines or other penalties from HMRC.

Get help from professionals

In a nutshell, bookkeeping with is easy, straightforward, and dependable. It will help you save money while allowing you to concentrate on what you really want to do: grow your company.

It makes sense to hire an cheap tax return accountant as soon as the time you spend slaving through the paperwork is costing you money. By entrusting your firm to a professional, you will focus on running your company the way you envision it without having to worry about complex numbers.