Sometimes the smallest details in your company’s finances can make a huge impact and keeping a record of all this information is integral to helping your business succeed. If your business is not bookkeeping effectively, you might not be creating the best opportunities for your business – So why is bookkeeping so important?
Coleman & Co are the experts that you need to contact when you require the highest standard of bookkeeping services. We keep a thorough record of every financial detail in your business, ensuring you never miss a beat.
Legal Requirements For Record Keeping
One of the main reasons that bookkeeping is so important is to ensure you do not receive any unwanted charges from the HMRC. You have the choice on whether to keep records on paper, digital or part of a software program, but these records must be kept safe as you may need them for a minimum of 22 months in the future.
Keeping information such as tax payments and how much you should owe based on your income will help you in the future if tax investigations occur, as you can show how much money you should owe. By providing the HMRC with incorrect tax payments, this could lead to a penalty costing more than the tax in the first place, so getting it right first time is pretty important.
Bookkeeping will ensure that you save money when it comes to your taxes as you will never overspend or underspend. By having details stored, you will always get it right first time and avoid errors.
Effectively Budgeting & Forecasting
Aside from legal issues, bookkeeping will make your business more successful and one of the ways it does this is through forecasting. Forecasting is a great way to look at what you have done in the past and use it to set targets for the future on what you expect and aspire to reach.
Bookkeeping must be used in this process as you can look at how much your business made, spent and where cash flow actually occurred. From here you can budget each sector of your business so that they do not overspend and you can keep costs as low as possible. Based on your projected sales for the month, by budgeting each sector, this will then lead to an increase in the profit you make month upon month.
Bookkeeping will allow you to be in control of exactly what you spend on supplies and payroll and how much should be left over. Business is all about maximising profit and bookkeeping is one of the most effective ways to manage this properly.
Identifying Your Business’ Strengths
It’s no good constantly trying to improve and grow your business based on something you are not good at – Bookkeeping will make sure that doesn’t happen. If you continue to make more money in one section of your business than you do in the other or spend too much in one place, your business will end in failure.
Bookkeeping will show every detail including where your income is coming from and what your expenditure is going into the most. You can easily find your business’ strengths and start to grow your business from this department to get the best results on a consistent basis using bookkeeping.
Meeting Financial Targets
Bookkeeping will make your life a whole lot easier when it comes to meeting financial targets and paying back money. Firstly, you can set yourself goals and know exactly when you have met them or how far away you are for each business year, month or quarter. This will also help to motivate staff to ensure you reach the income you expect.
For sole traders and start-up businesses, bookkeeping can offer help with much more serious matters such as paying back loans and debts. By keeping details of all your finances and transactions, you know when payments will have to be made by and can track your finances each month so you have enough money ready to make these payments.
If you need help with bookkeeping services in the Lisburn area, Coleman & Co are here to help. We will record all your financial transactions and use this to help your business flourish, saving you time in the process. Call us today on 028 9266 3599 for more information on the services we offer.