Bookkeeping involves monitoring all of your business income and expenses. It needs to be done regularly, not to mention accurately by an appointed person. The condition of your books matter, especially if you want the best chance at your local accountant being able to recoup expenses on your tax bill.
Though the reality is that bookkeeping can be time-consuming, not to mention confusing. Here are 3 signs you need to hire a bookkeeper to tell you more.
You’re Too Busy
Completing your books is like telling yourself you will go to the gym. You promise you’ll do it, but it never materialises. Before you know it, you’re due at the accountants with nothing to show for it. But before you beat yourself up, remember you are trying to run a business here. It can be difficult to complete such a time-consuming task when you are constantly being pulled in different directions.
The earlier you start your books the better. If you lack the time, then outsourcing yours to a professional bookkeeper is key. They’ll record every single transaction, log receipts and track your expenses. If something isn’t adding up, they’ll be on it in a shot. Compared with leaving your books to gather dust, it’s far better to get someone else to handle them before it becomes a real issue.
Your Accountant Has Pointed Out Mistakes
Picture the scene. You’ve diligently filled out your books all year, ready to hand them over to your accountant. Only, when they glance over at what you’ve recorded, there are huge gaps in your finances. Trying to find the source of the problem can take hours, and unless you rectify the situation, your accountant can’t submit your return. They also can’t offer any other business advice, because the true picture isn’t clear.
Mistakes can be costly for your business. Not least because if you submit your return late or incorrectly, you could be issued with a fine from HMRC. There’s no shame in admitting your bookkeeping skills need some fine-tuning. You could go on a bookkeeping course to learn where you are going wrong. Or better still, hire a bookkeeper who has been there, done there and got the t-shirt (and recorded said t-shirt on the books, too).
You Overpay Tax
A recent report found that one in six people overpay on their tax bill to HMRC. Not surprisingly, 28% of those surveyed put the error down to the confusing nature of completing a tax return. While you might not worry as much about overpaying tax versus underpaying it, given the error usually won’t be detected by HMRC, it’s worth taking note of. After all, if you overpay what you owe that’s more of your hard-earned money handed over to someone else.
Given how common tax overpayments are, you might not even be aware you are doing so in the first place. This is especially the case if you don’t have an accurate bookkeeping setup, which is vital for your accountant to be able to work out what you owe. So while hiring a bookkeeper doesn’t come for free, it could actually save you a lot of money in the long run.
To Sum Up
Bookkeeping isn’t the most exciting of tasks. But by doing so, you are setting yourself up for more accurate payments to HMRC. If you dread completing your books or simply lack the time, then hiring an accountant or bookkeeper is essential. That way, you can concentrate on running your business without being bogged down with all the admin that inevitably comes with it.
