No matter what business you own or what business you work in, there will be elements in every business that tie them all together. One key element is bookkeeping and accounting. Bookkeeping and accounting are essential aspects for every business and it plays an important role in the business, ranging from compliance of tax requirements, company returns, daily management to growth and development of the business.
Bookkeeping is a subsection of accounting. Bookkeeping is the activity of recording and categorizing of the financial transactions within the business on a timely and consistent basis. The history of bookkeeping can be traced back to 1494 to the founder of modern accounting, Italian Luca Pacioli. Pacioli gave us the principles and tools to what is known as Double Entry Bookkeeping. Double Entry Bookkeeping is the foundation from which all business transactions are recorded. While bookkeeping is about the recording of the business transactions, it is also the process of telling a story on the performance and wealth of the business, and as a result, bookkeepers and accounting play an important factor in every business regardless of its size.
Bookkeepers add value to the business not just by entering and recording transactions, but by also summarising these transactions into key reports for use by the business owner. The duties of a bookkeeper can vary and include wider tasks such as invoicing, paying bills, preparing tax returns like VAT, monitoring key performance indicators and providing advice to the business owners.
Having a qualified and experienced bookkeeper will bring many advantages to the business. Here is our take:
- Keeping on top of your taxes
As boring as tax is, it is still an essential requirement of every business to ensure that it has the process and people in place to competently record and calculate the taxes that arise from the transactions of the business. The most popular of these taxes is known as VAT (Value Added Tax). Keeping on top of your taxes means that you can predict your tax liabilities and have the cash in the bank to cover the liability.
- Meeting Government Regulations
An excellent bookkeeping process and a well-trained bookkeeper is required to ensure that the transactions of the business are recorded properly and accurately. This allows for the accountant to efficiently and accurately prepare company year end accounts as required by company law. In addition, as technology improves there will be a move towards real time live reporting of the business transactions with Revenue.
- Maintaining Accurate Records
No business can afford to make mistakes and lose money due to the stress of trying to retrieve vital pieces of information in order meet looming deadlines. A bookkeeper with the training, skills and knowledge can implement excellent bookkeeping processes and carry out the bookkeeping tasks on a regular basis to ensure that the business has the right information it needs when it needs it.
- Make Budgeting Easier
Bookkeeping is essential because once a business has accurate and timely posting of transactions, the business can then get a view of its costs and how its resources are allocated. As a result, bookkeepers and business owners can create a budget, or in simpler terms, a roadmap for the business. Without good bookkeeping, the business would be reduced to guess work in its decision making.
- Better Business Targets
With accurate regular bookkeeping comes the ability for the business to set clear measurable growth targets. By having a trained qualified bookkeeper maintaining your business transactions you can map out the business growth with more accuracy and the bookkeeper can produce monthly reports showing the progress in meeting those targets. In the absence of regular accurate bookkeeping, the business is left to guess their growth targets with resultant higher levels of failure.
- Extra Peace of Mind
Every business owner’s focus should be primarily on the development of the business and not the stress that is produced from not having organised accounts, bookkeeping in arrears, tax returns overdue, and basing business decisions on the how much is in the bank account (or not) on any given day.
As a business owner, when your business accounts are accurate & maintained, they are complete and comprehensible. You can rest assured that you have control of your business and can have the confidence to make informed decisions. Having a qualified bookkeeper to manage and maintain this level of control gives you extra peace of mind allowing you focus on driving the business forward.
As a bookkeeper you get to play an increasingly pivotal role in the business. Bookkeeping is vital to each and every business regardless of sector or industry. Bookkeeping is one of the most transferable skills in business today. With the wide adoption of online bookkeeping software and the push by Revenue to move to live reporting of business transactions, certified bookkeeping skills are increasingly in-demand. The evolution of computerised accounts provides people with certified skills, the opportunity to work remotely or start their own business.