Legally you have to keep track of the money that comes in and out of your business, this is called bookkeeping. This way you stay organised, you comply with HMRC and it can help you with financial forecasting. Without up to date, accurate information, a business can make bad decisions which can damage its own future.
Why do HMRC need me to do this?
HM Revenue and Customs need to be able to calculate your tax liabilities and your PAYE. If you fail to provide them with records then you could end up paying far more tax that you should.
Remember: If you are VAT registered then you have to keep bookkeeping records in accordance with HMRC’s guidelines.
Who else needs this information?
If you have a business loan then the bank will require a copy of your year-end accounts to see how well you are managing your business. Some banks require this on a monthly basis.
It is also important that you have a copy of these so that you keep track of your finances. It can help to strengthen your business as you can address any issues and plan for the future.
Doesn’t my accountant do my books?
Generally the answer to this one tends to be no. Imagine for a moment that you’re making a cake: your bookkeeping is the ingredients, the accountant is the one who puts the cake in the oven. Without the ingredients how will you make the cake?
But I don’t have time to do this
We understand how hard it can be to run a business and try and find the time to keep track of your bookkeeping at the same time. We have a strong membership of professional bookkeepers who are here to help. Whether you need someone for one day a month or a full time staff member, we can cater for all.
Can I learn how to do this myself?
We also offer one-on-one and group training courses in Sage, Xero, KashFlow and FreeAgent so that you can confidently maintain your records correctly. For more information on training email: firstname.lastname@example.org