What is bookkeeping and why is it important for Small Businesses
Posted in The virtual assistant blog
Bookkeeping can be a daunting thought for small business owners. Put simply, it is the recording of financial transactions and is the preliminary part of the process of accounting. These transactions include purchases, sales, receipts and payments made to or by the business. A bookkeeper can also be responsible for raising purchase orders, invoices and expense reports.
Whilst single- and double-entry bookkeeping are ‘named’ methods of bookkeeping, any way of recording financial transactions can be classed as bookkeeping. An accountant creates his/her reports from a bookkeeper’s records and submits the relevant information and forms to the government.
But why is bookkeeping for a small business so important?
Day-to-day, bookkeeping enables a business to meet payment deadlines to suppliers and to keep track of what it is owed to it from customers. Cash flow management is essential to the long-term survival of any business and it would not be possible without either an in house bookkeeping resource or an affordable bookkeeping service.
Looking to the future, bookkeeping supports business planning. It enables business owners to set goals and make projections for the future more easily. It also helps to evaluate the performance of a business – whether it is growing or stagnating – and allows business owners to adjust their strategies accordingly to remain on track to meet financial and growth goals.
A reliable bookkeeping service will also help business owners with their decision making when it’s time to find additional resource(s) and confirm whether your business can afford to pay for it.
Although bookkeeping is both necessary and advantageous to business owners, it can be very time consuming. In addition, it is essential to be accurate and therefore it is not a job that can be rushed. So whether you decide to do your own bookkeeping or outsource the job to one of the many bookkeeping services in the UK it’s something that must be done and done well.
If your book keeping requirements are keeping you awake at night or you would like to learn about our remote bookkeeping services call us on 0800 994 9016 or click here to request a free consultation.
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