Small Businesses can be a difficult job to manage and require consistent efforts. Initially, you are on your own. From management and marketing to finance, there is a lot to take care of. No matter how easy it seems, eventually, you will find handling finance is cumbersome, and it’s better if you can hire a bookkeeper to do the job.
Bookkeeping is important to small businesses as it helps maintain financial records and regulate cash flows. The business owners get an idea of the generated income and revenue and can thus plan different strategies accordingly. Furthermore, the software and technologies make budgeting easier and help in the ease of doing business. If the expenses and revenue are organised well, small businesses can save costs which can help them to expand the operations further.
The Importance of Bookkeeping in England
England has certain legal requirements and standards you might not know. For instance, it is mandatory in Barnsley to keep physical proof of every transaction – purchase, sales, receipts and payments, taxes and expenses. A bookkeeper in Barnsley can maintain the physical record, which can be beneficial during a tax inspection. Additionally, if you are registered for Vat, the process for accounting is much more complicated. Since Bookkeepers know the VAT collection and accounting process, they can increasingly save time.
We have compiled a list of why you should let the bookkeeper handle the finance while focusing on other departments.
- Budgeting – Budgets are the financial guidelines for a company’s growth. Having the information organised and keeping a tab on the financial records is significant. If a small business fails to keep up-to-date records, it’s much harder to assess the expenses and income, thus ruining the company’s ability to take corrective actions further.
- Filing Taxes – There are a variety of taxes currently in the UK-
- Corporation Tax
- Income Tax
- National Insurance
The entire tax structure can be too complicated and stressful for small businesses. Bookkeeping makes the entire process easy with a proper organisation of financial records. When the financial information is properly documented, you can save time filing the taxes at the end of each financial year.
- Helps to set business targets
A business has to take several decisions that include-
- Pricing of the product/services
- Apply for loans
- Decide the budget for digital marketing
- Improve customer service and quality
- New Recruitments
- Training requirements
Whether the company has enough potential to invest more or should cut costs depends on the cash flow. Bookkeeping allows small businesses to understand the cash flow and thus helps them to understand how much they can afford.
- Compliance with Legal Regulations
Businesses can’t run without adhering to basic legal laws and frameworks. Without proper knowledge of the system, you risk losing a large sum in the future or even getting your business closed forever. The MTD policy is one key part of the UK government’s plan that requires businesses to go digital. To upload the data to HMRCs Interface, you need to upload the data on accounting software. Bookkeepers are well versed with the technical requirements and the software and thus assist you in following the government policies.
- Obtain funding and investment
One thing that small businesses constantly need is ‘money’. Attracting investors is fundamental to a company’s growth and expansion potential. Funding can take several forms, such as business loans, angel investment, crowdfunding, grants, shares, etc. However, an investor would only invest in your company if they can look into your financial records with ease.
Not everyone is an expert in maintaining their own books. Hiring a bookkeeper can save you a lot of money in the long run.