Cloud Accounting

The Connotations of Bookkeeping VS The Reality and The Importance of The Role It Plays Within Your Agency

By October 16th, 2019 No Comments

When people think of bookkeeping, the connotations associated with the word aren’t great – boring, laborious, difficult.

Here at MAP it’s interesting, streamlined and straightforward.

You can know the basic bookkeeping rule – for every debit, there is a credit – and that’s about it, many not knowing what this even means. Modern-day accounting software, like Xero, simplifies bookkeeping so much that now 79% of business’ use a cloud accounting software.

What Is Bookkeeping?

Bookkeeping is simply the recording of financial affairs of a business – money going in and out of the business and why it is going in out.

When agency owners do their own bookkeeping they often leave their accounts untouched until it comes to meeting deadlines which can become very stressful very quickly when you suddenly have to reconcile three months worth of transactions so that you can file your VAT return without receiving any penalties from HMRC.

When this happens the work is rushed meaning that the coding of the transactions and also the tax treatment isn’t correct. This leads to inaccuracies meaning that any sort of financial reporting or budgeting you do will be unreliable. On top of this, your VAT bill will be higher because you won’t be re-claiming as much as you would otherwise be able to.

Other business owners outsource the job and have no interaction with it at all, just because they don’t fully understand the importance of it, once again leading to inaccuracies but this time it is because the outsourced bookkeeper doesn’t fully understand your business.

Why Do You Need Good Bookkeeping?

When your bookkeeping is done timely and accurately, the results are rewarding.

The money that you spend on a good bookkeeper will often be redeemed alone by the savings made on your VAT bill. On top of this, when the bookkeeper reconciles that account, the profit and loss report and balance sheet will also be generated allowing business owners to see where you are making your money and what you are spending your money on.

Based on the information generated you will be able to make accurate decisions to further your business, being able to identify ways to make savings, increase income and most importantly being able to make more profit.

What Next?

It is so important to implement a bookkeeping process, whether your bookkeeping is outsourced or it is done internally, it is important. If you need help with your bookkeeping processes, book your discovery call here to find out more.

For more information on MAP’s bookkeeping services, you can read more in our data collection brochure.

Sam Jedrzejewski

Finance Partner

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