All businesses must keep financial records of their sales, purchases and bank payments, and receipts. Know as your bookkeeping, you are recording all your financial transactions so that you can prepare annual accounts. As well as pay tax on your profits.
In 2023 most businesses will need to produce quarterly financial statements for tax purposes, as well as annual accounts. This can be done by yourself or indeed by anyone. You do not have to be an accountant or bookkeeper. Few business owners are trained in finance, and most therefore seek help from someone to do their bookkeeping.
Your finances are at the heart of your business…
New businesses often ignore bookkeeping as there are so many other things to do. However, your finances are the heart of your business, telling you how much you have sold, and whether you have made any money doing so. You need to know this from the very beginning, and throughout your business life, if you are to be successful. There is no point working hard, and then discovering it is costing more to make your goods or deliver services than you can earn selling them.
Setting up great bookkeeping systems at the beginning is one of the most important jobs you can do when you start your business. And if you are unsure what to do, ask a bookkeeper or accountant to do so for you.
Modern bookkeeping is about digitalising transactions so that they can be sorted as necessary to provide financial information and accounts. If you choose to use a bookkeeper or accountant, make sure they are using cloud accounting systems, as that is where the savings really occur.
What are the benefits of cloud accounting?
- Helps you manage your business and increase efficiency
- Access your business finances at any time, from any internet-connected device, which means you can run your business from anywhere you are
- Understand your real time cash position and provides you with daily updates from your bank accounts
- Collaborate with an accountant, bookkeeper, and your team
- Easily able to create and send invoices, with online payments and invoice reminders to ensure you get paid faster
- Protects your data with multiple layers of security, including industry-standard data encryption and secure data centres
- All data backed up automatically
Be aware that traditional computer based accounting systems, such as Sage 50, take twice as long to record your bookkeeping transactions compared to cloud accounting systems. We use Xero Cloud Accounting and are Xero Platinum Partners. Other cloud accounting systems include QuickBooks Online, Free Agent and KashFlow. There are about 30 others, some free, but most typically cost around £25 per month.
Getting the right system for you will save you so much time and money in the long run.
Modern bookkeeping is very different to traditional bookkeeping, and should enable you to have constantly available, up to date information. Most accountants or bookkeepers will complete this work in half the time it will take you to do it, which will enable you to spend more time doing what you enjoy so getting the right systems is important for both your business and your own personal life.
Get in touch if you would like to find out more information on getting set up with a cloud accounting system.
023 8000 1313