![]() Line by line, you’ll need to make sure all the debits and credits on the statement appear in your records. This is a key bookkeeping task that involves looking at your bank statement and checking it against your financial records. You might have heard the term “bank reconciliation”. ![]() Holding onto receipts for up to six years is also recommended. These financial records will be used later for your tax return, so accuracy is essential. That means, each time you make a purchase or receive a payment, the information needs to be stored, along with the amount. Keeping an accurate record of all incoming and outgoing transactions is the primary task of bookkeeping and a legal obligation for your business. In the meantime, here’s what you’ll need to do regularly to keep clean books: #1 – Record everything But, as your business grows (along with the volume of its financial activity), it’ll become more cost effective to hire an accountant or bookkeeper to take the reins while you focus on more value-adding tasks. ![]() In the early days, you’ll be able to manage all of these without too much trouble. Though many tasks fall under bookkeeping, there are five essentials that you need to do to keep things rolling smoothly and legally. ![]() And it doesn’t have to be difficult, boring, or time consuming. Once you’ve found your groove and got a solid foundation from bookkeeping, then you may consider how an accountant could help you power up your small business with more knowledge of its finances. This means any insights you try to gain would be unreliable Because without solid, accurate bookkeeping, any accounting you do will be based on flawed or incomplete data sets.To make sure you’re doing everything right from a legal point of view and reducing your risk of being fined.If you’re business is still small, bookkeeping should be your first priority for two reasons: That being said, you might not need to do this just yet. There is a lot more that goes into this, which is why you should collaborate with a certified accountant to make the most of your financial data. This helps you understand the financial health and performance of your business. You need to do some bookkeeping practices by law, and accuracy is essential for paying the right amount of tax to HMRC each year.Īccounting is the process of interpreting financial data and creating reports and forecasts This involves collecting and storing financial information such as receipts, invoices and bank statements. You’ll need to know the difference, because accounting is not something you can really tackle all by yourself (though you’ll still need high involvement in it).īookkeeping is the process of recording all the money that goes in and out of your business Using “bookkeeping” and “accounting” interchangeably is common, but the two terms do have different meanings. ![]()
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