Self-employment is becoming a much more popular option. In fact, 15.1% of the labour force in 2017 are self-employed according to the Office for National Statistics. This trend looks set to increase.
So, if you are one of those business owners then today we are going to talk about whether you should do your own accounts or not.
One thing is certain, it’s always advisable to keep clear, transparent business accounts. It’s the only real way to measure the success of your business over time and keep track of your cash flow.
One of the most important business decisions you’ll ever make is if you should use an accountant, a bookkeeper, or do your own accounts, with services like Ageras it’s very easy to find a qualified professional.
Doing your own accounts is fine for some businesses, but not all. If you don’t have the understanding or expertise, then this is probably not the best option for you. Also, as your business scales up, and becomes more complex, it’s probably a better idea to look for an accountant or bookkeeper.
Why You Need Business Accounts
There’s a number of benefits to keeping clear business accounts.
- Compliance – No matter what size your business is, you need to be compliant with the business and tax regulations governing your industry. Records are particularly invaluable should your business be selected for a tax audit.
- Decision Making – Clear records are very useful when you’re making business decisions. They help identify opportunities to increase income or decrease expenses. They can also help your business avoid cash-flow problems.
- Cash Management – Your records can show deposits and payments to your suppliers, as well as payments from your customers. This allows you to track every penny, and create a financial paper trail.
- Reduces Risk – Clear records can reduce the risk of embezzlement and fraud. There will be early indicators of such transactions that will be apparent in well-kept records.
Bookkeepers Vs. Accountants
Bookkeepers and accountants have slightly different roles in the financial cycle. However, there is some overlap between the two.
Bookkeepers
Bookkeeping is the process of recording financial transactions. This includes transactions such as purchases, sales, payments, and receipts. A bookkeeper will also balance and maintain the general ledgers, accounts, and payroll.
The most important document in bookkeeping is the general ledger. It records the day-to-day transactions, sales and expenses. The general ledger can be completed daily, weekly, or monthly.
Most bookkeepers now use computerised systems for bookkeeping. This is easier and less time consuming than paper entries. Regardless of which system is used, some transactions will need supporting documents.
Accountants
Accounting is the process of recording, sorting, storing and presenting financial transactions. This is done in a way that allows the business to make informed decisions.
Accountants can:
- Prepare entries
- Adjust entries
- Record transactions
- Analyse the operational costs
- Prepare financial statements
- Complete tax returns
Accounting gives reports that show the financial indicators of the business. Accountants look to provide awareness and understanding on issues such as profitability and cash flow. They also help with other issues such as financial forecasting, tax planning, and the subsequent tax filing.
Finding An Accountant Or Bookkeeper
Finding an accountant or bookkeeper can be difficult. There are so many things to consider. You need to find someone with experience and expertise. But you also need to find someone who fits with your business, personality and business identity.
There are some services that can match your business with the appropriate professional. Ageras is one of these services and it is totally free. You enter your requirements into the form, and the service selects potential matches for you. You can compare quotes, and look at reviews to find the right specialist for your business.
Let us know in the comments, are you self employed? And, do you look after your own accounts or hire a professional?
This is an article provided by our partners network. It might not necessarily reflect the views or opinions of our editorial team and management.
Contributed content
Founder Dinis Guarda
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