How Book-keeping Effectively Will Save You Time And Money
Looking for solutions to your book-keeping requirements ?
Do you need support on how to track and record your daily business transactions for tax purposes ?
Book-keeping makes your paperwork easier. It provides a system that tells you exactly what is going on in your small business.
Whether you use a manual or computer-based system, the same principles apply. It is worth deciding if you are going to computerize your accounts at an early stage.
While a traditional paper-based book-keeping system will look suitable for many start-ups, the accounting functions could soon swallow up your valuable time as the business starts to grow.
Your business is accountable to your local government through the tax authority by way of your accounting records .That is why many small business owners have an arsenal of financial assistance tools like a w-4 calculator for payroll , a computerized POS system to track sales and inventory, and other similar tools.
The standard of accounting records expected to be generated by your small business is governed by the Companies Act. .
The Act stipulates that your book-keeping records should be sufficient to show and explain your company's daily transactions, and can disclose with reasonable accuracy at any time the financial position of your business.
Although smaller entity records are expected to be less sophisticated than large plcs, the Companies Act still requires that the directors should keep up to date with their book-keeping.
If you are planning on transacting as a sole trader, or under a partnership, the need is exactly the same. Accurate records will provide information on how well your business is performing, and also provide the basis for the figures on your self assessment tax return .
This means that by law your records have to be accurate. Tax law says that everyone who pays tax must keep the book-keeping records they need to fill in a tax return.
If you do not keep proper records, it is impossible to prove what you have earned and what you have spent. By law, you must keep all your records(as evidence) for at least five years from the latest date for sending back your tax return, but it is up to you to decide how you keep them.
On occasion you may not be able to obtain all book-keeping evidence (such as a receipt) for cash expenses , especially where the amounts are small. If this happens, recording is still important.
You should make a note as soon as possible of the amount you spent, when you spent it and what it was for.
Your Tax Office may decide to look into your tax return or claim. If it does, it may want to look at your records.
The exact records you need to keep for your book-keeping will depend on the types of income or gains, tax deductible expenses, personal allowances , other deductions and reliefs you put on your tax return or claim.
The book-keeping Process
You have to record all the money coming into your business and all the money going out, both to keep track of your cash flow and for your tax records. To do this you will need:
A record of all business sales .
Records of payments into and out of your bank account.
Records of payments made by cash.
A cash book for summarizing the information. Cash Books come in hard copy and electronic forms.
The Cash Book, whether hard copy or electronic, simply records all the money coming into and going out of your bank account.
Your bookkeeper can help you set up a simple book-keeping system, by choosing headings to suit your business.
You may also choose to save by sourcing the service. Please do not hesitate to contact us, to help you set up and support your cashbook requirements at a pocket friendly fee.
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