Torr Waterfield discuss bookkeeping and why it is so important to keep it up to date.
As we are all aware, Making Tax Digital is fast approaching meaning you need to have bookkeeping software in place for your business that you like!
It may take quite some time to find bookkeeping software that you get along with and understand. There are many out there including: Xero, Sage One and Iris Kashflow.
Keeping your bookkeeping up to date can be good for many reasons:
You can have an up to date profit and loss account to see how your business is doing and compare it to other periods
Review your VAT return to look at liabilities
You can make your own sales invoices on most bookkeeping software which can save a lot of time
You can also keep track of your creditors and debtors which will lead to better cash control and more reliable forecasting
In my experience the bookkeeping software that I have personally found best, and clients who have no bookkeeping experience have seemed to like the most, is Xero. This is for many reasons, some of them being the following:
Bank feeds - We all know that typing up your bank can be very time consuming and then you come to reconcile it you’re 1p out! This is why I love bank feeds. Everything is pulled through from your online banking, meaning you do not need to worry about that 1p; all you have to do is match the bank receipts against sales invoices and payments to purchase invoices. Xero also has the function of ‘rules’ meaning if you have a standing order set up for example £25.00 to Vodafone every month, you can create a rule to routinely post this bank payment to telephone expenses with the specified VAT treatment.
Submitting your VAT return online. Once you are happy with your VAT return on Xero you can ‘File it now’ meaning you just need to put your government gateway login information on to Xero and it will be submitted for you - unfortunately you still have to make the payment to HMRC!
Paperless record keeping - How many of us have an office full of the past 6 years of records? Everyone I’m hoping! This is a really handy feature with Xero, especially if you like a tidy office. With Xero you can attach a pdf copy of the invoice online meaning there will always be a copy of that invoice and you will not have to keep a paper version of it.
If you are looking into starting your bookkeeping with online software and would like some advice on which one is best for your specific needs, or would like some training, please get in touch with us on 0116 242 3400.