Why is ensuring your bookkeeping is up to date so important? 

Why is ensuring your Bookkeeping is up to date so important? 

December 5, 2023

It is really important to ensure that all of your business activity and bookkeeping is kept as up to date and accurate as possible.

As a company director or a business owner, there are a number of legal or ‘HMRC driven’ reasons for keeping your records up to date 

  1. Legal Requirements – Company law (Companies House)
  1. VAT – ‘Making Tax Digital’ (MTD) 
  1. Customer Relationships – Payment for outstanding invoices 
  1. HMRC – Ability to submit Submission of VAT, payroll and corporation tax returns and payment(s) made on time  
  1. Cash !! – How much do you actually have ?

In addition to the issues above, once you have ‘up to date’ and ‘accurate’ bookkeeping for your own business,  there is the opportunity of understanding and making good decisions to drive growth i.e.  

  • Knowing how the business is performing (turnover)
  • Knowing your costs (payroll and overheads) 
  • Knowing your profit, and 
  • Knowing how much cash is in the bank!

REMEMBER – None of these legal, HMRC, or business management issues can be dealt with very easily or effectively if your ‘day to day’ bookkeeping is 3, 4, or 5 months out of date  . . . . .

What are the likely problems that your business may start to experience where your bookkeeping is NOT up to date ??

  • HOW do you get your CUSTOMERS to pay you on time or even know what they OWE you? 
  • HOW do you PAY your Suppliers if you don’t really know how much you owe them? 
  • ARE YOU SURE that all of the VAT from Supplier invoices is being claimed on your VAT returns? 
  • HOW do you know IF your business is ‘PROFITABLE’ and making money? 
  • HOW do you manage RISKS or OPPORTUNITIES if your bookkeeping is not up to date or accurate?
  • HOW do you complete your quarterly VAT returns on time or your Corporation tax return at the end of the year?

Also where you are involved in managing your own bookkeeping, trying to bring 3, 4, or 5 months of activity up to date will involve 

  • late nights
  • weekends and 
  • impact the time that YOU can spend on the business e.g. marketing, ‘onboarding’ new clients, delivering client work, etc.

Ultimately, investing the right level of either time and/or money in the bookkeeping for the business is key to successful business growth!  

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