Frequently Asked Questions

General Questions

Answer:

Bookkeeping is the process of logging and sorting your business incomings and outgoings. This can take a lot of time and needs to be accurate - failing to keep proper records can incur a fine of up to £3,000 from HMRC. A qualified bookkeeper will be familiar with bookkeeping systems, procedures and the latest tax rules so your records will be correct and up to date. Also, a good bookkeeper will be able to provide figures and information to help you make business decisions.

Answer:

It is possible to do bookkeeping using a pen and paper or with simple excel spreadsheets but accounting software will be set up with lots of short cuts and reports to make your records easier to keep and more useful. Also, by April 2020 HMRC requires all businesses and landlords to provide quarterly income and outgoing details so that they are aware of what is owed in taxes. This will have to be done with software. Moving your records to a software system now will mean that you are ahead of the game. Although accounting software can be expensive the cost savings in both time and accuracy will more than balance this out.

Answer:

Many small businesses still leave all their bookkeeping to the end of the year when they hand it to their Accountant. This means that by the time they get any information beyond the amount in the bank it is out of date by more than a year. If something needs to be changed in the business it could be too late by then. You could be losing money on something and not know that you need to deal with things differently, or a particular part of your business may be very profitable but you don't know so haven't been focusing on it. By keeping your records up to date every month you can get feedback on what is working well and what is not working so well much more quickly. Also, if you have reached a limit for any taxes, such as VAT, HMRC will not accept that you have not done your accounts yet as an excuse so this could cost you a lot of money in fines and penalties.