Bookkeeping duties for small businesses and Startups

Bookkeeping is the process of recording (data entry) and reconciling (comparing transactions against bank statements) all business transactions so you have an accurate, up-to-date view of your business financials.

Accurately recording your business transactions helps to ensure that you claim all allowable tax-deductible expenses when you file a tax return, ensures that you satisfy all accounting and compliance requirements with Revenue, and ensures that you have reliable financial information for planning and budgeting decisions.

If you need help setting up a bookkeeping system for the first time – we’re here to help. In this guide, we’ll explain the important bookkeeping terms and duties, how you can save time and money by automating your bookkeeping, and how to decide if you need to outsource your bookkeeping.

If at any stage you need our help, reach out to our Client Services Team – we’re here to support your business.

What is the difference between bookkeeping and accounting?

Bookkeeping involves keeping track of your financial records.

Bookkeeping is the process of recording business transactions, such as invoices, bank statements, and receipts, and entering that information into a database – we recommend using accounting software. The documents collected are then used to calculate the business’ tax returns and financial statements.

Sole Traders and Limited Companies need to do regular bookkeeping so you can file accurate tax returns and financial statements.

Accounting involves reporting, interpreting, and analysing the finances in your business.

Accounting is a bit more complicated than bookkeeping. Many of our clients can do the bookkeeping in-house but outsource their accounting requirements to ensure that their Revenue and Companies Registration Office deadlines are being looked after.

Accountants may oversee your bookkeeping and make sure the records are maintained correctly but they don’t usually carry out any data entry. Your accountant will prepare technical accounting duties like preparing profit and loss accounts, balance sheets and file your tax returns.

Bookkeeping terms to know

Get familiar with these terms if you're managing a business. Even if you outsource your bookkeeping, it's useful to know what these terms mean.

  • Bank reconciliation

    This is the process of comparing your sales and expenses against your bank account. This ensures that the correct amounts are coming in and out. It’s used as a verification check.

  • Accounts payable

    Any outstanding payments to your suppliers are categorised as your ‘accounts payable’. If you have a supplier or vendor that you haven’t paid yet, they will need to be organised and managed to ensure they are paid on time.

  • Accounts receivable

    This is the money that is owed to the business. This occurs when your business provides goods or services, but payment is not due until a later stage. If you don’t offer any goods or services on credit or you are a business to consumer (B2C) business, you may not come across this term.

Why do you need books and records?

Businesses and individuals must keep a record of any paperwork used for calculating taxes. This includes bank statements, invoices, and receipts received during the year, i.e. any money received or paid out by the business.

You need to maintain these books and records so you can calculate your tax liability each year. Similarly, if you have an accountant, they will need all your books and records to prepare your financial statements.

A complete business record should contain details explaining transactions, and having the correct invoice/receipt for each transaction.

As a Xero firm, most of our clients work with Xero software rather than physical books, making running a successful business more efficient, smooth, and secure. If you’re not using bookkeeping software, talk to our Client Services Team about taking your books online – we’re here to help.

Types of documents needed for bookkeeping

  • Sales and purchase invoices/receipts
  • Bank and Visa statements
  • Payslips and wage sheets
  • Stock / ecommerce / Point Of Sale (POS) reports
  • Verification records for assets such as property, machinery or vehicles
  • Cash books and receipts

Storing your documents

In general, all books, records, and documents relevant to your business need to be kept for six years. Revenue has extensive powers to inspect your records and it is an offence if you or your employees fail to co-operate with Revenue in relation to the inspection of your records.

For peace of mind that your records are secure and always up to date – start using online accounting software for easy data management.

Automate your bookkeeping

We recommend doing your bookkeeping online, which means moving away from Google Drive or Dropbox as a data management tool and using cloud-based software that is specifically designed for managing small business financials.

Automating your bookkeeping with Xero is the easiest and most efficient way to maintain control of your cash flow. Any data that you enter into Xero will be transformed into practical insights that will help you make better business decisions and help you to plan for growth.

Talk to us if you would like to move your accounts online. We have a special accountancy offer for new Limited Companies. This includes a free Premium subscription to Xero online accountancy software.

Benefits of using an automated bookkeeping system

Saves hours of admin time a week
Upload your documents, send invoices, and check your cash flow from anywhere, on any device.
Make better business decisions
Use reporting features to help you make informed business decisions based on your accurate data.
Increase your cash flow visibility
Remain in control of your finances by having complete visibility on the movement of cash in and out of your business.

Why Xero?

We love using Xero online accounting software because it is easy to set up, easy to use and it has a very user-friendly interface, making it a great software to use.

Our internal Accounts Team uses Xero so we have personal experience with the software and happily recommend them to all small businesses and Startup.

We have helped many of our clients switch to Xero from different software and set up on Xero in just a couple of hours. We also provide monthly Xero bookkeeping workshops that provide training on how to get the most out of your Xero subscription.

If you’d like to know more about Xero and what it offers, register for our next webinar about how to Take Your Accounts Online With Xero

Doing your own bookkeeping

When you’re just starting out and working out the costs of setting up a business, you might be wondering if it’s possible to do your own bookkeeping.

You may only have a few transactions per week, and keeping track of these may not take a lot of time, so it is possible to do it yourself and it could save you spending on bookkeeping fees. You can also follow these 5 tips for business Startups to help make bookkeeping more manageable.

However, if your bookkeeping is not done correctly when it comes to doing your tax returns, this could incur additional costs from your accountant or increase the risk of incorrect calculations when filing your tax returns. Why not talk to our Client Services about your situation and we can recommend the best service for your size – we’re here to help.

Find out how we can help

If you want to hand your bookkeeping over to professionals, Accountant Online offers bookkeeping services for small businesses and Startups in Ireland.

All our bookkeepers and accounting teams are certified Xero advisors so we have the knowledge and experience in-house to help your business move to the cloud, providing you with confidence that your business finances are in safe hands.

We also offer free Xero subscriptions as part of our Startup Offer for Limited Companies, so get in touch with our Client Services Team today. We can help you decide on the services you need.

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