Bookkeeping is the action of recording all financial transactions undertaken by a business. That means all money in and out, invoices raised and paid, purchases, sales and so on. It covers everything – from payroll requirements, payment of pensions, National Insurance and tax to dealing with employee expenses. It is a key part of ensuring your business runs smoothly and therefore is a task that should be prioritised.
New business owners have a large amount of administration to deal with and it is very easy to let the bookkeeping fall by the wayside, but this could be a costly mistake, for example, if you fail to lodge returns with HM Revenue & Customs. It seems like something that is easy to catch up on further down the line, which for very small businesses may be possible, but there is always a chance that something could get missed.
Responsibilities of business owners
There are a number of regulatory responsibilities business owners need to comply with, including:
- Corporation tax returns
- Filing accounts with Companies House
- Filing your confirmation statement annually with Companies House
- Paying tax due to HMRC, including VAT each quarter if you are registered for it
- Paying National Insurance contributions for employees
- Paying pensions for employees if your company has a pension (most companies now have to provide a pension for employees under auto-enrolment legislation)
By making sure all of your financial transaction data is up-to-date, you will be less likely to miss any of these important filing deadlines, which are different depending on when your business was set up.
Deal with bookkeeping yourself or employ a professional?
This is an important question to ask, and you should be very honest with yourself. As a hard-pushed business owner, do you have time to take care of your bookkeeping? If you are concerned that it might get left behind, then bite the bullet and employ a specialist to do this work for you.
Ensure any bookkeeper you employ is qualified by searching for someone who is registered with a professional accounting body. Find a bookkeeper through the directory of the Association of Accounting Technicians or try the 'find a bookkeeper' service on the Institute of Certified Bookkeepers site.
However, if you decide to do the bookkeeping yourself, there are a number of online accounting packages that can help you keep on top of your accounts. The majority will allow you to take photographs of expenses and you can link business bank accounts as well as charge cards and credit cards to your accounting packages through open banking.
Check out online accounting packages
Some accounting packages worth considering include QuickBooks, Freeagent, Xero and Zoho Books, but a quick online search will present you with many more options.
Depending on how complicated your finances are, you might decide to use both an online accounting package and a bookkeeper to deal with your accounting requirements. There is no right or wrong answer as to whether you do this part of the job yourself or find an outsourced or in-house solution. For most companies, it will depend on their size, the number of employees and turnover.
If you want your business to succeed, then bookkeeping needs to be a priority. As you start to streamline your finances, it is worth finding out how charge cards and credit cards can help.