Keeping accurate business records is vital for any business as it provides the owner with useful information on how the business is doing. As a small business owner there are two options available to you, to do your books yourself or to hand them over to an accountant. The choice obviously depends on a number of different factors:
Firstly, there is the question of affordability. If you can afford to pay an accountant to keep your accounting records up to date, then this is the best choice for you. Not only will you get accurate accounts but taxation, VAT and end of year returns can be filed at the correct time with less chance of late penalty charges. You also have the advantage of having more time to concentrate on other aspects of your business.
The other option is to start keeping your own accounting records and for this you will need to invest in a computerised accounting package. Technological progress has brought many advantages in its wake and the accounting field is no exception. For the majority of businesses the days of the manual accounting system are gone when armed with a calculator and a good set of eyes you spent hours totalling up all your day to day business expenses. Over the years we have seen many computerised accounting packages introduced which have made life much easier for business owners.
Nowadays, because of computerised accounting packages, the majority of small business owners can do their accounts themselves. The key is to input the correct information on the system to get accurate reports on the business performance. In addition, most accounting packages come with telephone and email support to help with problems that might arise and there is also the facility of filing returns like VAT, Tax Returns and PAYE online.
The cost to the business will be the initial setting up of the system and the training that will be required. It is advisable to have back up support for which you pay an annual or a monthly fee but it is worth having this as it helps you with any queries that might arise.
There are many different accounting options you can choose depending on the size of your business and the type of business set up you run. It also depends on what reports you would like to see at the end of an accounting period. Some small home businesses require a simple book keeping package which gives the option to enter sales, purchases, bank and cash transactions and expenses that the business incurs on a daily basis. This can be downloaded from the internet and is quite adequate to use as long as it is accredited by the ICB (Institute of Certified Book-keepers).
Other businesses might require a more detailed accounting system which incorporates stock control, credit control and payroll features. There are accounting packages which can also provide you with standardised business stationery for which you might also require a compatible printer. Some popular accounting packages are QuickBooks, MYOB, Access, Sage Instant or Sage Line 50 which range from the basic package to a more comprehensive one depending on your business requirements.
Deciding to computerise your manual accounting system will be a wise decision and one which you will not regret as it will make your record keeping easier, quicker and more efficient as it minimises the risk of human error. Moreover, you save both time and money by doing a lot of the work yourself rather than paying an accountant. But before you decide on any package, do your research and find out exactly which one is accredited and will adequately fulfil your company requirements. There is detailed information provided on the internet, by telephone and through the post to help you make the correct choice.
Whatever the decision, do not underestimate the importance of keeping good records for your business, no matter how small its size. Whether you use an Excel spreadsheet to keep records of your income and expenditure or use a more sophisticated accounting package, it will be time well spent. And if you run a small home business do not forget to keep receipts of all business expenses incurred; they will all be useful when you do your Self Assessment at the end of the financial period. Good record keeping is essential in case of any Inland Revenue checks or audits.
.