What are bookkeeping services?
Bookkeeping is the process of recording a business’s financial transactions. These transactions will usually include things like your sales, purchases, cash payments and receipts, wages and VAT entries. Historically, bookkeeping involved the use of books and ledgers (hence the name) to record these transactions, but thankfully that is a thing of the past. Today, most bookkeeping services are completed on spreadsheets and software.
At Raw, we believe bookkeeping services are central to the success of your small business finances. Getting things right at the bookkeeping stage is crucial, lets find out why.
Why is bookkeeping important?
Bookkeeping is important because done right, it gives you an accurate, timely picture of your business. It shows your financial position in real time. So, what is the benefit of that?
It means you know who owes you money, and whether any invoices are overdue. If they are, you know who to chase, which helps you bring in the money your owed sooner and improve your cashflow. Bookkeeping also shows you who you owe money to. That way, you can make sure you are paying your suppliers within their payment terms.
Bookkeeping is also important because it gives you comfort in the accuracy of things like your VAT returns. It also shows if your business is struggling or thriving, which with a bit of analysis, can help you identify opportunities or areas for improvement. Finally, regular bookkeeping means you can start to estimate tax bills and put money aside for these. That’s helpful because corporation tax for small businesses is a cost you need to budget for.
At Raw, we believe in the power that accurate, timely bookkeeping can have on businesses. That’s why all our packages include bookkeeping services as standard – it’s just too important not to.
Who needs a bookkeeper?
Businesses including Limited companies, partnerships and those who are self-employed will all benefit from bookkeeping services. For VAT registered businesses, bookkeeping services are essential as you will likely have quarterly filing obligations to meet.
Without a bookkeeper, you are unlikely to be able to accurately prepare VAT returns, meaning you may pay too much or too little VAT. Failing to maintain accurate records could give rise to penalties and fines too.
Even non-VAT registered businesses should have a bookkeeper or someone in the business should be doing regular bookkeeping. Without this, you will be guessing about how your business is doing. It also makes year end obligations a lot harder, because you have to roundup the financial records for the whole year, while someone who is bookkeeping regularly will already have completed most of the work. Finally, you will be in the dark over what your tax bill will be, and so won’t be able to prepare for this.
Bookkeeping with Xero
Most bookkeeping is now completed in spreadsheets or software, like Xero. Using software like Xero (QuickBooks, FreeAgent or Sage are the other main ones) can make bookkeeping straight forward. These tools can be linked with your bank account to pull through the transaction data saving you hours of time. Once these transactions are in your system you can easily reconcile these against invoices, supplier bills or you can simply add a new transaction if its not already in the software.
For VAT registered businesses, some sort of bookkeeping software is usually required as VAT returns must be Making Tax Digital (MTD) compliant, and all the ones mentioned above tick this box!
The real power of bookkeeping software like Xero is that your accountant can have access too. This enables them to review your finances on a regular basis. This real time information gives them the ammunition to support you and your business with advice and opportunities like tax planning.
Accounting and bookkeeping
A lot of small businesses can get confused over the difference between bookkeeping and accounting, and whether they need a bookkeeper or an accountant. Well, we’ll let you in to a little secret…these days a lot of Accountants provide bookkeeping services.
There’s a simple reason for this, which is that cloud bookkeeping using the likes of Xero and Sage has made bookkeeping easier to provide as a service. Accountants have been able to combine regular bookkeeping and year-end accounts work to improve the overall services clients receive.
So why does it improve your overall service? Well, where we provide monthly bookkeeping, we are able to spot opportunities or issues early, advise you ahead of your year end and support you in growing your business.
That’s why at Raw, when you choose us as your accountant, we’ll also usually undertake your bookkeeping. That said, some of our clients do have in-house bookkeepers when they join us, or an external bookkeeper they’re already working with. Where that’s the case, we’re more than happy to work closely alongside them.
There’s also a bit of a misconception that accountants are much more expensive than a bookkeeper would be, but that’s not the case with us. That’s because where we do the bookkeeping, we are able to save a huge amount of time when it comes to preparing your year-end accounts and corporation tax return – after all we already have all the information we need! The overall cost is therefore the same, or maybe even less than using a standalone bookkeeper and a standalone accountant.
Bookkeeping for small businesses
At Raw, we’ve seen first-hand the power accurate, timely, bookkeeping has on small businesses. As a service, we think it will have the single biggest impact in improving your overall finance function and putting you back in control. That’s why our small business accounting packages all include bookkeeping as standard.
As we’ve already mentioned, the benefit of using us as your small business bookkeeper and accountant, is that there’s no duplication of work, improving the efficiency of your overall accounts process. This can help save you money while have an experienced, qualified accountant you can contact throughout the year.
For those businesses looking to take things a step further with management accounts, bookkeeping is an absolute essential before you can even consider this.
Bookkeeping near me
If you’re looking for local bookkeeping services then get in touch. We deliver our bookkeeping to businesses across Berkshire, Surrey and North Hampshire. Just head on over to our contact page to find out more about our local bookkeeping services.