Surveys suggest that for an average small business, financial paperwork and records can take up as much as 20% of available work time.
Bookkeeping services for small business
Surveys suggest that for an average small business, financial paperwork and records can take up as much as 20% of available work time. For most businesses that time could be far more productively spent on customer facing matters, product or service development or marketing. The question is, can your business afford a bookkeeper? Additionally, is it better to have a bookkeeper and an accountant, is it necessary and are the roles separate and different?
Small business bookkeeping obligations
Failure to keep records can result in a fine of up to £3000 and disqualification as a Company Director so it is important to understand your obligations.
According to the Companies Act all companies must keep “true and fair” financial and accounting records for at least 6 years and in some cases longer such as if a transaction covers more than one year’s accounting period or if you have bought something that is expected to last longer than 6 years like equipment or machinery.
Receipts and invoices detailing all money sent and received by the company must be kept as well as details of all assets owned and any debts the company owes or is owed.
Details of stock owned at the end of the financial year and the stock-takings used to work this out must always be available and details of all goods bought and sold throughout the year and, unless you are running a retail business, you will also have to keep a log of who you bought and sold to and from.