Why is good bookkeeping important?
Good bookkeeping is important in all businesses, no matter how big or small. It’s the process of recording all the business transactions so you can complete accurate tax returns and fulfil all accounting and compliance requirements with Revenue.
You’ll also find it easier to manage a business with a good bookkeeping system in place. You can manage your cash flow properly, make more informed business decisions and it’s easier to grow a business with a good bookkeeping system from the beginning.
Don’t have time to look after bookkeeping yourself? Talk to our Client Services Team about our Bookkeeping Services. We’re happy to talk to you about our acounting packages.
What is the difference between bookkeeping and accounting?
Bookkeeping involves keeping track of your business’ financial records.
Bookkeeping is the process of recording business transactions, such as invoices, bank statements and receipts and entering that information into a database. The documents collected are then used to calculate the business’ tax returns and financial statements.
Sole Traders need a good bookkeeping system so they can file accurate tax returns at the end of year. Limited Companies need to do bookkeeping so your accountant can prepare accurate financial statements and tax returns.
Accounting involves reporting, interpreting and analysing the finances in your business.
Accounting is a bit more complicated than bookkeeping and many of our clients do bookkeeping themselves but then outsource their accounting requirements.
Accountants will usually oversee your bookkeeping and make sure the records are maintained correctly. Then they will prepare your financial statements, so you be sure your accounting and compliance obligations, such as your Annual Return, Corporation Tax Returns and VAT Returns are taken care of.
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.
This is the process of comparing your sales and expenses against your bank account to ensure that the correct amounts are coming in and out. It’s used as a verification check.
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.
This is the money that is owed to the business because 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.
What are the benefits of moving my bookkeeping online?
We recommend doing your bookkeeping online and this goes beyond keeping a copy of receipts and invoices in Google Drive or Dropbox.
Moving your accounts online means using an online accounting software that helps you organise and manage all your business transactions on the cloud. Using intelligent software means you can enter all your records and the system will automatically sort the amounts into different categories.
Talk to us if you would like to move your accounts online. We have a special accountancy offer for new Limited Companies that includes a free Premium subscription to Xero online accountancy software.
We recommend Xero online accounting software.
We are Xero Platinum Partners and Xero Certifed Users so happily recommend them to you. Our internal Accounts Team also use Xero so we have experience with the software and we help many of our clients get started and switch to Xero software.
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.
What records should I keep?
Revenue recommends that you keep your books and records for a minimum of 6 years.
To keep your books and records for a shorter period, you must receive written confirmation from Revenue. This is only allowed for specific circumstances.
- Sales and purchase invoices/receipts
- Bank and Visa statements
- Payslips and wage sheets
- Stock reports
- Nominal ledgers
- Physical accounting books
Why do you need books and records?
Businesses and individuals must keep a record of any paperwork used for calculating taxes. This paperwork includes bank statements, invoices and receipts that you receive throughout the year. In other words, this is a record of all sales and purchases, any money received and paid out by the business.
These books and records need to be maintained so you can calculate your tax liability each year. If you have an accountant, they will need all your books and records before they can prepare your financial statements.
A complete business record should contain relevant details to explain transaction. This includes having the correct invoice or receipt for each transaction.
Check out our top 5 bookkeeping tips for more tips on how to keep your books and records.
Can I do the bookkeeping myself?
Bookkeeping can be a very time-consuming task if you’re not properly trained. But it is possible to do it yourself.
We offer a free Xero Premium subscription with our Startup Offer for accountancy services for new Limited Companies. Xero is an online accounting software that makes it easy for you to manage and record your transactions, bank accounts and invoices.
Many of our clients ask us to take care of their bookkeeping so they have time to focus on running their business. If you would like a quote of our bookkeeping services, our Client Services Team are happy to talk you through the services we offer.
If you would prefer to hand your bookkeeping over to professionals, Accountant Online offer bookkeeping services.
Get in touch with our Client Services Team today. We can help you decide on the services you need. Call us on +353 1 905 9364 or email us at firstname.lastname@example.org.