Most small business owners believe they don’t need a bookkeeper as they can do the books themselves and save some money. In reality, not all business owners are interested in maintaining the books for their business. Ultimately, they then get left for “a later date”. The issue of why hire a bookkeeper is left for another time when the business is less busy.
The problem with this is that the workload builds up and often gets squeezed in on a late night or weekend and this is the organised business owners! Others leave it until their tax return is almost due to sit down and do the books quickly.
What are the issues with leaving your books until a few weeks before the tax return is due?
- A whole year’s work in one go! Taking time away from what you should be doing – running your business. In many trades, this will mean a loss of income for the time taken off.
- Mistakes could be made. If HMRC decided to do an audit of your company, there could be potential fines payable.
- If you run over the deadline, you will receive a late filing penalty.
What if you are on top of everything, is there still need to hire a bookkeeper?
Yes, there are many reasons why you should still hire a bookkeeper:
- They have studied for many years to get qualifications and experience, just as a business owner has done in their trade. This means all the transactions, receipts and invoices will be posted correctly. A business owner who hasn’t studied bookkeeping, would not know all the correct way to record transactions, which could end up in incorrect accounts being filed and ultimately a fine from HMRC.
- The work will get done whilst you are getting on with running your business, so you don’t have the hassle and your books are always up to date.
- Value will be added by preparing reports on a regular basis showing who owes you money, who you owe money to, turnover and profit.
- The correct business expenses will be put through to maximise your tax deductions.
This all sounds great, but aren’t bookkeepers expensive?
Bookkeepers vary in price depending on the services offered, but based on the above, surely it’s more costly not to have a bookkeeper? Below is an example of a sole trader:
Phil is a self employed plumber. He turns over £40K per year. He doesn’t have time to keep on top of his books, so needs to take time off in January each year to complete his books and submit his tax return:
Phil’s costs – doing it himself:
8 working days at £200 per day of lost income: £1,600
Tax Total owed: £8,000
Total tax return costs: £9,600
Phil’s costs – using a bookkeeper:
40 hours at £25 per hour: £1000
Tax Total Owed: £6,500
Total tax return costs: £7,500
A bookkeeper will complete the accounts a lot quicker than someone unqualified and maximise the tax deductions. In this example, there is a saving of £2,100 by paying for a bookkeeper to do the work for you. Direct Peak prefer to offer a fixed price so the hourly rate is not necessarily based on Direct Peak’s rate.
If you are interested in hiring a bookkeeper to help your business, you can contact Direct Peak on any of the below contact details:
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Hiring A Bookkeeper in Peterborough Will Benefit Your Business
Have you ever wondered why there are so many bookkeepers in Peterborough running successful businesses? The reason is very simple; lots of small to medium sized businesses understand the wisdom of employing a qualified bookkeeper to help them survive those tricky early years in business that can be a minefield, but they also understand how a bookkeeper in Peterborough can help them flourish and grow in later years of their business.
There are many reasons that hiring a bookkeeper in Peterborough will benefit your business; for example small businesses find admin a struggle and another job that stays on the list but doesn’t quite get completed. Business owners and entrepreneurs are creative people so routine admin chores aren’t something they enjoy. Meanwhile a bookkeeper in Peterborough enjoys the admin of bookkeeping and will complete these less exciting jobs for businesses so they can get on with what they enjoy and what they’re good at.
Stay on top of the key financials
Turnover and cash flow are the two things that will either make or break a business; if there are no sales your business will be stillborn, yet if your cash flow is not managed correctly you will also find your business just won’t survive. Bookkeeping services in Peterborough allow you to concentrate on generating turnover while your bookkeeper can manage your cash flow for you, and chase late payers too.
Keep the Taxman happy
Successful entrepreneurs and business owners are aware that they know everything there is to know about their business or industry; but when it comes to accounts and bookkeeping it is often a different story. This is why they employ the services of a bookkeeper in Peterborough to ensure their accounts are kept up to date and the taxman is kept happy!
Can’t accounting software do this for me?
While accounting software can be an amazing time saving tool for businesses; the accounting software cannot do everything- somebody still needs to enter the data so timely management and financial control of tax and cash flow can be completed. Again this is something that you can employ the services of a bookkeeper in Peterborough for and will benefit your business greatly.
Using a bookkeeper in Peterborough will not cost you a small fortune; but the expertise and advice that a professional bookkeeper can offer may actually save you a small fortune as well as providing numerous benefits to you business.
If you would like to know more about how a bookkeeper can benefit your business then please contact the friendly and professional team at Direct Peak.
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Business bookkeeping – Tips for entrepreneurs
In the surge and energy of beginning a new venture, it’s easy to forget the significance of good business bookkeeping.
At the point when this happens, entrepreneurs regularly get a reality check in the later days of the business. This can arrive in an assortment of ways, including:
- You get an expensive surprise at tax time
- Inventory has been “vanishing” without you knowing,
- Employees are miss-categorising transactions
- Your costly accountant sends you a weighty bill for the time required to “tidy up” your books.
At the point when issues happen, it isn’t so much that you set out to do things wrong; it normally simply “happens” in light of the way your business has developed. Frequently personal money and business money gets intermixed. This can be hard to deal with. A friend of mine is right now looking at a screen on his accounting application that is requesting that he classify more than 800 transactions since he utilises his own bank account for business.
There are numerous great internet accounting software services you can utilise. However, the question is which transactions are we discussing? Personal or business? As it were, will you be setting up categories and entering in every one of the transactions, or will you have a business bookkeeper do it for you?
Consider these fundamental territories that fall into the domain of independent business bookkeeping:
- Accounts receivable and payable,
What number of those does your business have? The more that depict your operation, the more prominent your requirement for an expert business bookkeeping service. Sage, Quickbooks, Kashflow and our favourite Xero are all great options for a business bookkeeping software. However, if you outsource your business bookkeeping, it’s likely your bookkeeper will give you a recommendation.
Similarly as with everything, business bookkeeping is a feature of your business that you need to set up appropriately from day one. However, in the event that you missed that open door, consider bringing a bookkeeper on board ASAP and have that expert settle the issues and get your bookkeeping running smoothly.
It will cost you somewhat more initially, yet in the long run the investment will be justified. Your stresses, and potential risk will be significantly decreased.
Two Essential Bookkeeping Tips
Follow these two essential bookkeeping tips, you’ll thank us for it!
Keep It Separate
As a business owner you need to make sure that your business and personal accounts are kept separately. While it may be tempting to give clients your bank details and for the money to go into your personal account – this will not help you or your business in the long run.
Make sure you don’t pay personal expenses from your business account. No matter how good the deals are to book a holiday from your company credit card. Avoid it at all costs! Make sure you keep both accounts completely separate. Then you’ll find it much easier to view where your business is at and what is happening, financially wise, in your business.
Keep On Top
It is okay to hate bookkeeping. However, it is not okay to put it off. The longer you leave it, the more of a mess you will have to deal with. Also,the harder it will be to find errors and solutions in your records, Not to mention that missing invoice, bank statement or receipt.
If you really hate bookkeeping and keep finding that you are putting it off, or dreading doing it – then why not use the services of a professional bookkeeper in Peterborough? Even if you don’t need our full accounting services, you can still use our bookkeepers to keep you on top of your business finances.
Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.
Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.