How bookkeeping works can be simply explained as the process of recording all financial transactions made by a business. We as bookkeepers, are responsible for recording, classifying and organising every financial transaction that is made by the business operations.
Now at this stage, we must point out that bookkeeping differs from accounting. The accounting process uses the books kept by the bookkeeper to prepare the end of year accounting statements and accounts.
What is bookkeeping?
As described above, bookkeeping is the process of tracking every financial transaction made by a business from its opening to its closing. Each transaction is recorded based on supporting documentation which can be in the form of a receipt, invoice, purchase order or similar. This is evidence that the transaction took place.
How Bookkeeping works
Bookkeeping can include:
- Making payments
- Chasing payments from clients and customers
- Ensuring the business pays the right amount of tax
- Claiming back tax for the business
- Managing payroll to pay staff and HMRC correctly
Bookkeeping can track payments in and out of a business using three different kinds of financial records: Cashbook (recording cash flow), Sales invoice (paid and unpaid invoices) and Purchase invoice (recording what you have bought as a business). Businesses can certainly keep more records but these are usually the minimum records kept.
With many small business owners, it is important to have a bookkeeper and sometimes more urgent than having an accountant. Having Cloud Bookkeeping Warwick look after your bookkeeping will put your mind at rest, save you time and enable your business to grow as fast as you want it to.
We can offer bookkeeping for your business on either a daily, weekly, monthly or quarterly basis depending on the size of your business and as we are a small team, we have the flexibility to be able to tailor a service to suit your needs. We are Xero certified partners and also use other cloud-based accounting software such as QuickBooks, FreeAgent and Sage.
If you are thinking about outsourcing your bookkeeping then please get in touch and we can discuss how we can support you.