Receive and benefit from online bookkeeping services in the UK

Don’t ignore this function! Bookkeeping is vital as it helps you track all your income and expenses. Without keeping your books tidy, you may miss important deadlines or make costly mistakes. Payroll problems will start to rise – for example, you won’t have enough money to pay wages to your employees! Plus, your financing options may become limited because you’ll have nothing to show to potential investors or lenders. Bookkeeping is the lifeline of your business. Sort it out with Lyel Accountants.

Don’t ignore this function! Bookkeeping is vital as it helps you track all your income and expenses. Without keeping your books tidy, you may miss important deadlines or make costly mistakes. Payroll problems will start to rise – for example, you won’t have enough money to pay wages to your employees! Plus, your financing options may become limited because you’ll have nothing to show to potential investors or lenders. Bookkeeping is the lifeline of your business. Sort it out with Lyel Accountants.

• Start by setting up an accounting system to use now and going forward. Plan to do your bookkeeping on a monthly basis at a minimum and put aside time for it.
• Pull together all documentation for the period you have got behind – receipts, invoices, bank statements, effectively anything and everything that is outgoing or incoming to your business.
• If you do not have some kind of accounting software, eg, QuickBooks, FreeAgent, FreshBooks, Xero etc, it is advisable to invest in one. Adding the backlog will take some time but it will make life a lot easier going forward.
• Import your bank transactions directly into the accounting software which will ensure accuracy.
• If the backlog is huge, break it down into chunks but make sure you keep on top of everything else you create.
• If it all seems too much, take on a professional company to take this on for you. They will be able to set you straight so you can manage it going forward.

A profit and loss account is one of the most important financial documents you can have to understand the financial health of your business. It looks particularly at the revenues, costs and expenses which your business has incurred over a certain period.

• You need to include all the money that has come into your business from the commercial activity, and deduct all of the expenses associated with your commercial activity over a set period of time.
• You would include things like revenue, cost of goods/services sold and business overheads, and exclude things like loans, HMRC payments and large equipment purchases – these will appear on your Balance Sheet.
• If the figure is positive, then you have made a profit; if it is negative, then you have made a loss.

It is something you could do yourself, or this would be a standard item provided by an accountant for your business.

One of the common mistakes that businesses can make when doing their bookkeeping themselves is to classify an expense or income incorrectly. It can be difficult to know where to assign an expense or income or even to inadvertently classify a business expense as a personal expense or vice versa. Some expenses are not allowable to offset tax against so you need to have a good understanding of what can and can’t be included. Mistakes can affect your taxation position and lead to inaccurate financial reporting, resulting in investigations or even fines from HMRC.

If you have misclassified an entry in your bookkeeping, you should:

• Correct the mistake and understand why it was made.
• Identify the impact that the mistake has had on your wider accounting and reporting.
• Advise HMRC if the mistake has affected your reporting.
• Seek the assistance of an expert bookkeeper or accountant.

Taking the time to put clear guidance in place on the classification of income and expenses before you start your bookkeeping, will ensure you can take advantage of the tax deductions that are available to you and deliver accurate reporting.

Some of the most common bookkeeping mistakes are:

• Inaccurate date entry which can include misclassification of expenses
• Mixing business and personal financial information
• Not regularly reconciling your accounts
• Not retaining and recording receipts
• Failing to produce regular reporting

Invariably, none of these occur by intent but frequently because you are busy running your business, you don’t have experience of providing bookkeeping and you don’t actually know what you need to do or how to do it.

The easiest and quickest way to avoid these and many other mistakes, is to take on an experienced bookkeeper or accountant with bookkeeping services. The other option is to spend time learning how to do your business bookkeeping and invest in suitable accounting software to help.