Why Is Bookkeeping Important?
Bookkeeping dates back thousands of years, the oldest records of bookkeeping have been found in archaeological digs and National Geographic reported on a 5000-year-old stone tablet showing a record of how much barley was used over 37 months – books!
So why is bookkeeping so important?
Bookkeeping is the foundation upon which the rest of your accounting practices are built.
Everything from payroll to tax deductions needs a solid bookkeeping base to work from. Without it, you cannot hope to manage your finances.
- You couldn’t save for tax because you’d have to guess at what your income and deductibles were!
- You couldn’t pay your staff wages representative of your businesses value and income.
- You’d never know how much to put into budgets for advertising, recruitment, etc.
- You couldn’t tell HMRC how much you earned.
- You’d have to manually calculate the value of income and capital, liabilities, assets, etc.
Access Accurate Financial Data
Modern bookkeeping offers advanced methods of avoiding mistakes and ensuring you have accurate information. Through both custom accounting software, data reconciliation and double-entry bookkeeping, you can keep current and accurate financial books that allow you to get important insights at a glance.
Swiftly Fill Out Tax Returns
Filling out tax returns can be a complicated process, made ever worse by bad or non-existent bookkeeping. Bookkeeping allows you to easily identify and submit your income and expenditure to the government. Without books, you have to pour over receipts and bank statements. It also helps save tax as with all available deductibles recorded, your tax relief is optimised.
Create Valuable Financial Reports
Investors need financial reports to make important decisions on how they want to commit to your business. The better your bookkeeping, the better your reports; the better your reports, the higher your chances are of gaining investors.
Plan for the Future
Up-to-date books allow you to act on current tasks but also plan for the future. By evaluating your performance, you can make changes to optimise your profitability and/or meet financial targets. Without bookkeeping, you cannot gauge the financial health of your business well enough to make such decisions.
To help you negotiate all this you need a reliable, experienced bookkeeper like The Hollies. Call us on 01743 790086.