Bookkeeping is the recording of daily business transactions and a bookkeeper is the one who does the work of maintaining the accounts of a business. Without the proper recording of your business transaction, failure is inevitable.
Bookkeeping will give you insights into the financial performance of your business and help you to make appropriate business decisions. The responsibilities of a bookkeeper include:
As a small a business owner, you may not consider it necessary to have proper records of your transactions due to other responsibilities you are handling; however, you need the services of a bookkeeper for reasons that include:
Every business owner is expected to have records of how money is coming in and going out of their business. Without bookkeeping, you will not have proper records of your business transactions and will likely not know whether you are making profit or not. Also, it will help you to know when and where to cut down on unnecessary expenses.
Having organized financial records ensures your business transactions are well documented. You will know where to find the right information on time. With bookkeeping you will be able to provide the necessary information when requested for.
Disorganized financial records put your business at risk of being fined or penalized by HMRC. When your records are well maintained through good bookkeeping, you can access them easily when needed and prepare good documentation to send tax return to HMRC. Also, scattered receipts and misplaced invoices could make HMRC conclude that you have not been complying with tax laws. Bookkeeping will save you from going through difficult period with HMRC when your business is being audited.
Bookkeeping provides you the opportunity of making strategic decisions about your business. Well-structured plans and goals are only feasible when you can track the performance of your business. With bookkeeping, you can make informed decisions that will be beneficial to your business.
As a business owner, you should know how you are making money and what you are spending it on. Bookkeeping helps you to control your finances. You will know who owes you and the bills you need to settle. With bookkeeping, you will have a full grasp of your cash inflow and cash outflow. This is necessary for the smooth running of your business.
Budgeting is necessary to keep your business on track. With bookkeeping, you can track your cashflow, you will be able to know the exact amount you are earning or spending on your operating, financing and investing activities. This will help you to make budget for future expenses, prepare how to finance a project and where to get the resources.
With all the importance of bookkeeping discussed above, it is necessary to make it an integral part of your business.
Lukro Ltd is here to make the bookkeeping functions easier for you. With our expertise and requisite qualifications, we will properly organize and keep adequate records of your financial transactions. We also offer professional bookkeeping services that will help you keep organized financial records and properly manage your finances, enabling you to run your business smoothly.
Written on 2019-05-15
This article was written by Agnieszka - a professional bookkeeper with several years of experience in the financial service industry. Agnieszka works with Lukro Ltd, the accounting and bookkeeping company provides professional and friendly bookkeeping and business support services to individuals, sole-traders, partnerships, and small businesses. We help welders, plumbers, engineers, electricians, hairstylists, beauty therapists and many more.
Starting a new business requires you to have proper planning, make necessary financial decisions and get the necessary legal documents. It can look a bit complex, especially for new small business owners; however, by taking informed steps, you can begin to build your business.
Bookkeeping is so vital to your business that its absence can lead to improper financial management and pitch you against HMRC. Integrating accounting software with bookkeeping makes the function more efficient.
Bookkeeping is the daily recording of business financial transactions, which include income and expenses. It is necessary because it helps to measure the performance of the business. Proper bookkeeping makes it easier for companies to keep track of all their financial information.
As a business owner, isn't it exciting to see your company making more sales and generating more profit? You'll have more transactions and potentially cross the VAT threshold as your business continues to grow. At this stage, it becomes more challenging to manage your business finances, keep track of your cash flow, prepare payrolls, and handle your tax affairs yourself.