Welcome to our new 5-part series on how you are probably losing money if you are not doing regular bookkeeping & reporting within your business.
What is Bookkeeping?
Bookkeeping is essentially the financial record-keeping for your business – done properly, it will tell you everything that’s come in, everything that’s gone out, everyone who owes you, everyone who you owe, how much tax you will need to pay, and the list just goes on.
Reporting without accurate bookkeeping is about as useful as an accountant without a calculator … but – paired with good bookkeeping, checking out your business reports regularly will enable you to plan for the future, see how to scale and when and will stop you from falling into any financial pitfalls.
Now we’ve got that cleared up, let’s get into it…
Part 1 – The Tax Edition.
We all know that only 2 things are for certain … and one of them is taxes! And, we know that it’s just not fun! So you could be forgiven for procrastinating the bookkeeping until you absolutely have to. But could doing this actually mean you’re paying more tax?
With up-to-date bookkeeping, you can have a very accurate, daily estimate on how much tax you will owe – be it personal or Corporation Tax for your Limited Company. Having that figure in mind means that you could actually choose to invest some of the profits in things that will help you and your business in the future – new computer equipment, office furniture, app development, or even a nice big chunk going into your personal pension.
If you don’t know what the tax figure is until after the year has ended, there’s very little you can do to change that amount.
Keeping an eye on your personal takings throughout the year too means that you can choose to keep yourself under certain thresholds, and not cross into higher tax brackets.
And of course, you can’t really put a price on that feeling of knowing you’re prepared for the tax bill and have the money safely stored away for when you need it
The best way to keep up-to-date and accurate is to use accounting software (sorry, but spreadsheets just don’t cut it anymore!), and get clued up on how to understand the data and what it’s telling you.
As if these tax reasons alone aren’t enough to convince you that you need to be doing regular bookkeeping and business reporting, check out:
Part 3 – The Business Structure Edition
Part 4 – The Time Freedom Edition
Part 5 – The Mind Freedom Edition
How can PPF help?
If you’d like to get some training on how to do accurate bookkeeping & reporting for yourself, or you’d like to outsource this to the experts, fill in our Quick Questionnaire and we’ll be more than happy to help you.
