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The Importance Of Recording Transactions

By August 29, 2018Bookkeeping

Bookkeeping is essential for every business and recording transactions correctly must always be done. Not only will this assist for legal purposes, but it could also prevent any disputes you encounter with your customers.

Coleman & Co can work as bookkeepers for all businesses in Lisburn, recording transactions correctly. We ensure your finances are always managed by our team to prevent errors from occurring.

Spending & Charging

The main reason for recording transactions is to ensure you are charging and being charged accurately. Nobody ever wants unwanted costs and this includes your customers. If you are paying fixed monthlies or one time payments, transactions should never be more than what you expect. With effective recording, you ensure transactions are correct and do not cause any issues.

This can happen to both big and small businesses, but should always be avoided. Most recently, “British Gas paid 32.65m in refunds”, according to BBC News, after overcharging customers. Whilst this is often worst-case scenario, it shows, regardless of who you are dealing with, payments can be incorrect.

Your own customers should always be charged the correct amount. In order to keep your expenditure low, constant recording and management of transactions is required.

Legal Record Keeping

In addition to keeping all charges accurate, recording transactions will have a significant contribution towards legal requirements and record keeping. When owning your own business, whether this is private or public, your finances must be recorded. Record keeping can help massively with a lot of business processes, including your tax returns.

Once the recording of transactions, invoices and other financial information is complete, you should store this securely. It may be required in the future and tax records should always be kept for a minimum of 5 years, giving you another reason to efficiently record and store details of all transactions. If any legal problems arise in the future, you can refer to previous transactions for both the HMRC and customers.

When recording transactions, there are several people you should be sharing your financial data with. By outsourcing to professional accountants, we have the best software available to make these records easily accessible for all clients, whilst maintaining security.

Manage Your Costs

Recording transactions helps with many business processes but can also improve your profit massively. By reducing costs and ensuring customers pay on time and the right amount, you will gradually improve profit. Customer payments should always be managed correctly to avoid cancellations and inaccurate cash flow forecasts.

This will also reduce your business expenditure in several ways. Recording transactions allows you to prepare finances for tax returns, therefore meeting deadlines and avoiding penalties. Your tax returns should always be completed across the year and well in advance of any deadlines, ensuring any minor errors can be altered before it becomes a big problem. Having all the transactions recorded will always make this process simpler.

Additionally, you can manage your outgoings much more effectively by tracking your transactions. If you notice any unusual payments or an unexpected rise in costs for the month, your records could explain this. By making comparisons each month, you can reduce your expenditure, identifying where money can be saved.

Contact Us

The importance of recording transactions should never be underestimated by a business. If you would like more information on the services we have available, speak to Coleman & Co today. We are happy to provide advice in addition to accurate and professional bookkeeping services for all businesses in Lisburn. Call us today on 028 9266 3599 or fill in our contact form to make an enquiry.

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