What Is Bookkeeping?
Bookkeeping is the process of maintaining the financial records of your business, by recording, filing organising, and reconciling all of the financial transactions that your business has made. In the past these records would have been recorded by hand to the accounting ledger in paper books, hence why the process was known as bookkeeping.
In the modern world this process no longer involves maintaining physical records in books; transactions are now recorded in Excel or even better in software such as Xero accounting software. The principles remain the same, but the Xero accounting software can really help in terms of efficiency and accuracy by removing a lot of the manual entries that would have been made previously.
Interested in using a highly trained bookkeeper or a Xero accounting software expert? Contact our Oxford based bookkeeping services today.
Benefits of bookkeeping
There are many benefits to bookkeeping, some of which are outlined below.
Financial record keeping is legally required and if HMRC were to inspect your records it is important that your bookkeeping has been done accurately and everything is organised, so as to avoid fines or further investigation, it is a serious offence to submit inaccurate records to HMRC or Companies House.
This is also important for your own benefit, by having correct and systematically kept records you will be able to more easily extract this information to help complete statutory submissions such as your VAT returns, tax returns or your company annual accounts for the year.
Furthermore, you will be able to help yourself answer questions about your business. For example, if you think your gas bill is too high you can easily consult your ‘books’ to see what the charge was for the same period in the prior year.
You may also buy and sell goods and services on credit, it is important that these ledgers are maintained so you can see who you owe money to and who owes you money. This can help you plan your cash flow so you do not run into liquidity issues. Additionally, you won’t accidently chase a customer for money who has already paid and run the risk of upsetting them.
Our Oxford bookkeeping services team can help you to maximise your business’ potential by making sure your business records are always accurate and up to date.
Reasons for outsourcing your bookkeeping
A professional bookkeeper can do various things for your business and there are many reasons to outsource your bookkeeping, the most important of these is to help your business reach its full potential. Even by using Xero accounting software, it could still take hours each week or month to complete your bookkeeping accurately, this could be longer if you are not an experienced bookkeeper. This time could be much better spent acquiring new customers or looking after your existing customers to help you maximise your revenue.
Expertise is also another reason to outsource your bookkeeping, everything in accounting is not just double entry for movements in cash. There are also concepts such as accruals, prepayments, provisions, liabilities and deferred tax (which is not just tax that hasn’t been paid yet, this is an accounting concept). Are you confident you know, understand and are able to record all of these transactions yourself? A mistake could be costly, you could incur fines, you might even overstate your profit accidently and have to pay too much tax.
Our Oxford bookkeepers are highly trained, please get in touch today to find out what they can do to help you and your business.
Your Accountant in Oxford
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