Bookkeeping is a small yet vital part of the accounting function. It is the process that includes the recording and reporting of financial information in the business – be small, medium or large. Whereas, accounting is the process of using the data in analysing the position of the financial position and helps in decisions on the best management of the finances. Accounting is about creating a financial strategy.
Bookkeeping is the process of managing the day-to-day finances, including –
- Arranging payment bills
- Collection of payment from clients and customers
- Payment of the right amount of tax
- Claiming expenses
- Payroll management
- Payment made to staff
- HMRC submission
- Business Bank Reconciliations
- Credit Card Management
If you are managing a small business and decides to take care of your bookkeeping, it is essential to prepare it with the highest standard. It is because – it helps to ensure that you have the accurate information recorded that helps in the decision of payment management, decreases the accountancy fee costs and decreases the risk of any fines raised from HMRC. HMRC can fine the business for up to £3,000 for bad record-keeping.
Tip on best bookkeeping for your business management
- Make sure you have the business bank account set up. Use it only for the business transaction.
- When there is a need for money for a personal expense, transfer the amount from the business account in the form of drawings, salary, reimbursed expenses to the personal account. This process makes it easier to record when preparing books.
- Reconciliation of the business bank account on the regular basis is the next vital step that you should follow. It helps in capturing business expenditure and income perfectly.
- Include all the business expenditure in the accounts to save tax.
- Ensure that even simple expenses such as stationary payment, professional subscriptions and business commutation charges are recorded appropriately. Even small expenses missed will end up with significant values at the later stage.
- When using a software-based accounting system, ensure that you perfectly trained an aware of even the minor details of the software. Complete the course with the best result and have a one to one talk with the accountant to ensure you understand the basics of transaction.
- Make sure your bookkeeping is up to date. Have a time slot in your schedule to prepare the weekly and monthly books to have it updated regularly without a miss.
- Have the details of cash flow forecasting, chasing debtors and list of supplies that need to be paid.
But, having said and done, if you find that bookkeeping is taking the time that you could invest in other important tasks of the business, it is best to hire a bookkeeper or outsource the task to bookkeeping company.
If you need the local accountant to provide assistance in bookkeeping services or payroll services in Leicester, get in touch with the team of Easy Paye immediately. We can provide the best payroll service to our client with the years of experience we have gained. We are committed to providing a personal and trusted service to ensure our client satisfaction. Click Here For Payroll Information and assistance that we offer our clients. Thank you!