I came across a wonderful (not!) expression just recently whilst I have been completing my IAB (International Association of Bookkeepers) course. Am not saying I do not believe this as it is factually correct but what a way to say it …
Bookkeeping is the mechanistic system of recording business transactions in an account format ….
When I first started out, it quickly became apparent that I had to record all my income and outgoings and that I also needed a business bank account. Understanding the difference between being a sole trader and a limited company came a few years later so at the beginning my bookkeeping requirement was quite simplistic.
I was already using a program called Money Personal and Business and it seemed that Profit & Loss accounts made sense to me. It has only been now, whilst consolidating those years of ad hoc learning using the training course I am on, that I can see why the keeping of accounts in certain ways does help however, when first setting out, seeing a pile of paperwork make sense did not seem as important as being out there and doing the work, my accountants always tried to ensure I saw this differently but, as with many start up businesses, thoughts on accountants tend to only be at year ends!
For a sole trader I know that what we want to do is as little paperwork as possible and that when it comes to the end of the tax year, our thoughts only then turn to an accountant, yet a bookkeeper deals with that day-to-day paperwork that means you don’t have to wait to know how well you are doing in your business or whether you are actually making money or losing money or even who owes you, who you owe and whether or not you are making the most of the people you are trading with.
Computerised accounting done on a prompt regular basis gives you the comfort of knowing that you can stay in business because you are getting information when you need it.
Setting up the right system for you (and your accountant) is vital and that is where a good bookkeeper with an in-depth knowledge of how your business operates means that you can get an accounts system that works more for you rather than becomes a burden.
The computerised system used within the UK recommended by so many acountants is Sage. However, before you get to thinking about how you are going to keep your books you also need to think about :
Do you really want to do the day-to-day books yourself?
Do you feel comfortable with numbers on a computer and interpreting what they mean to you and your business?
How much accounting knowledge do you have and how much do you need (it can be more than you realise in both ways!)
Would you rather be out there working not sitting with head in hands and paper on desk?
Do you feel more comfortable with pen and paper?
Do you understand what bookkeeping really does?
Will it benefit your business for you to do your own accounts?
Will it be of benefit to you to do your own figures?
Lots of questions should always be thought through about this side of your business so ensure that you build in a chat to me about where I could help if you start thinking about getting assistance with this side of your business.
I am on firstname.lastname@example.org or 07880 601700 and am happy to come and have a free no obligation chat about your Options.