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What is bookkeeping and why do I need it?

Sunday, June 16, 2019
By Cheryl Sharp
What is bookkeeping and why do I need it?

We talk about bookkeeping as part of our accountancy services, but what is bookkeeping and why do you need it?

In a nutshell, bookkeeping is taking all your records – bank statements, sales invoices, purchase receipts, mileage logs, stock take, etc – and recording them in a proper format in order to allow the accounts to be prepared.  This is the bit in between you giving us your records and us preparing your accounts. 

At PPF, the bookkeeping for our clients is done on Xero, with the help of Receipt Bank.  Clients raise their sales invoices and email out to their clients through Xero.  All purchases are sorted through Receipt Bank – just snap a picture of a physical receipt or forward any email receipts on to a special email.  Your bank account (current, savings, credit card, PayPal etc) are all connected to Xero (all completely safe and no actual access to your bank account) so transactions are imported.  We’re then able to reconcile all the transactions – which is basically matching up the invoices and receipts to your bank account and ensuring all transactions are recorded properly.  Any transactions outside of your bank statements are then also recorded properly to ensure your bookkeeping is complete.

Bookkeeping is the foundation of your accounting system; without all these transactions being recorded properly we are not able to prepare accounts, so it is an essential part of the process.

At PPF, we offer two options for your bookkeeping:

1 - we are able to do this on your behalf – then all you need to do is raise your sales invoices and take pictures of your receipts/forward emails to Receipt Bank and we will do the rest.  This is the perfect option for those who want to free-up as much time as possible and want to keep the cost of your year end accounts to a minimum.  Or,

2 – we give you the tools so you can do this yourself – we’ll get you all set up on Xero and Receipt Bank, and you can come along to one of our workshops for basic training.  Please bear in mind though that if you complete your own bookkeeping, our year end accounts will increase in cost to allow us to check over your work and make any corrections required. 

You can find out more about our pricing here.

Keeping your bookkeeping up to date allows you to have a full picture at all times of your finances and where you are situated, profit wise.  This is why we complete bookkeeping for our clients on a daily basis and recommend if you’re doing it yourself to complete it daily – or at the very least, weekly. 

With up to date numbers you are able to understand your business better and use the numbers to help you to grow your business.  With live data we are able to take your accounting to the next level and assist with budgeting and forecasting for the future.  We can prepare cashflow forecasts to really understand your cash flow position and spot any issues well in advance – and also any surpluses so you can make the most of them!  With up to date records you’re able to see easier who owes you what – and deal with late payers more efficiently. 

With daily bookkeeping it also means you’re able to answer queries quicker – how many times have you come to do your accounts and can’t remember what a receipt 8 months before was for?!  With daily bookkeeping you’ll have everything fresh in your mind.  It also means it’s little and often, not some horrible, huge task that you keep putting off doing.  And as it’s all done regularly and up to date it means quarter end for VAT (and the new MTD regime) and year end are all so much easier as the foundations are all there ready for you to build on.

To put it bluntly – live numbers opens the doors to bigger and better things for you and your business.  They are the foundations of building the right path forward to realising your dreams.

If you are interested in exploring working with us at PPF, please visit our Work With Us page where you can complete a quick questionnaire and book a discovery call with us.