Bookkeeping helps keep your eye on your profits and losses by tracking all outgoings and income streams while helping identify areas for growth and efficency
By Diane Pilling · 24 Oct 2012
Bookkeeping the process of recording all the cash flow of a business for example, expenses, income, and tax. Effective bookkeeping can help the firm keep an eye on their profits and losses and help identify future growth. Not only does it help the business stay lean and profitable but also up to date bookkeeping is a requirement for paying income tax, corporate tax amongst others.
Bookkeeping involves listing the money owed to, suppliers, contractors, HMRC , and employees. Any money that leaves the business is encompassed in the outgoings, including electricity bills and even money for stationary. As well as all outgoings, good bookkeeping will keep track of all monies coming into the business. Any products or services purchased or any grants gained. Even though bookkeeping is essential for business growth and paying tax it can be very time consuming and overwhelming. Therefore many businesses prefer for an outside contractor to keep the books up-to-date. However, as with everything, this costs money and to many small businesses, another outgoing is simply not sustainable.
While bookkeeping can seem like a job too big for any one person, if kept on top of it can be a lot easier keep up to date. Make sure all receipts are kept and filed. Not just in a pile! If there is months worth of receipts from any business that needs to be filed it will take days. If the task seems too big, get a quick tutorial. Maybe the paperwork seems to big and you need to get up to date. Maybe we could help get you on the right track and leave the rest to you.
Tax does work both ways, remember that tax returns will need to be proved and without bookkeeping this will be difficult. So good bookkeeping can not only benefit your business with growth and keep you on the right side of the law but also come in useful if the government has to give back. Keep on track with your books and they will help you in return!