How should I manage my bookkeeping?
The world of bookkeeping has changed significantly over the last few years, leading many to ask the question, how should I manage my bookkeeping?
What is bookkeeping?
The concept of bookkeeping is simple when you consider the etymology of the word – keeping of the books. The reference to books refers to a time whereby there would have been three actual books (journals or ledgers) that made up the accounts – one for sales, one for purchases and one general ledger. The job of the bookkeeper was to keep these up to date with income and expenditure, invoices and purchases.
Bookkeeping as a profession
Bookkeeping is not just a verb associated with running a business. Bookkeeping is a profession and it even has its own Chartered Institute. But in recent years, television and radio advertising might lead you to believe it’s a software package. In years gone by, the first step to developing an accounts team within a business would start with a bookkeeper, typically a shared role with another operations function or provided by a freelance bookkeeper supporting multiple businesses. There were professionals, but there were more who simply ‘picked up doing the books’.
Xero, FreeAgent, QuickBooks and Sage for bookkeeping
Today, the range of options for bookkeeping is greater than ever, with software packages like Xero, FreeAgent, QuickBooks and Sage providing business owners with the tools to ‘do the books’ on-the-go. But whilst cloud-based accounting software has undoubtedly changed the market, even the rules built into these packages cannot stop mistakes being made. The adverts that promote these applications are slightly misleading – giving the impression that anyone can set them up, use them and get a clean set of accounts out the other end. But the old adage of s##t in, s##t out remains pertinent. The irony being that these adverts target skilled professionals in their own sectors – many of whom would surely argue that not just anyone can do their job.
So, how should I manage my bookkeeping?
You may have read the above and thought we are not fans of the cloud accounting packages, but far from it. They have revolutionised our work and we love them. Clients enter their sales and purchases and at the same time we can create the accounts – all entirely live. And that is probably the answer to the question How should I manage my bookkeeping? A hybrid of bookkeeping software supported by a qualified accounting professional(s) on the other end. This keeps the costs down – you don’t have to employ someone – but ensures your tax returns and a quality set of statutory accounts can continue to be produced and filed on time – which is after all, what it is all about!
Based on search data to our website, this series of blog posts is designed to answer some of the most common ‘how to’ queries around setting up, running a company and managing your personal and commercial tax affairs. If there is a particular question you would like us to answer, please contact us today. Click here to view all the articles in this series.