Regular bookkeeping should not be confused with accounting or annual accounts. Bookkeeping is simply the process of keeping a business’s records up to date, by adding and/or categorising records of sales, purchases and monetary transactions. This is usually done on a monthly basis for smaller businesses or self-employed individuals.
Regular Bookkeeping: Advantages
There are a number of great advantages from regular bookkeeping:-
Quite often a payment that you have set up as a one-off, or for a limited period, will continually be repeated. The longer it goes on, the less your chances of a refund.
Getting to end of your tax year and discovering that you should have registered for VAT or some other tax earlier, is NOT acceptable to HMRC. You will need to pay the tax all the way back to the point where you should have registered.
The longer you leave a debt owed to you by a customer, the less chance you have of getting paid. Regular bookkeeping allows you to keep up with unpaid invoices, and take early action to collect monies owed to you.
Most businesses have got a fairly good idea of how much is owed to them at any given point. However, most are much less accurate about how much they owe to their suppliers. Knowing one without the other is pointless; and one of the main reasons why small businesses run into trouble.
What about the cost?
Although it may not be obvious, the fact is that the task of bookkeeping includes around 85% of the work required for your annual or year end accounts. So the bookkeeping will always need to be done for the Profit and Loss part of your accounts; whether it’s done monthly or all at once at the end of the year.
Typically, if I do your bookkeeping on a monthly basis, when it gets time for your tax return, most of the work is already done and I only have to charge you a much smaller fee for the annual Balance Sheet and submitting your tax return.
Bookkeeping: The Process
The bookkeeping process is fairly simple. I can work with whatever system suits you, or whatever system you currently use
If you are set up with any of the main software accounting packages (Sage, Xero, QuickBooks, FreeAgent, etc), simply add me as a ‘Manager’ and I will check and categorise your bank transactions for you.
Alternatively, I can work with a monthly CSV file of your bank transactions, and copies of your invoices, and receipts for purchases made on credit
If you send out your own invoices and you just want me to checkover and categorise your bank transactions, then I would recommend a once per month schedule.