How to Get Business Bookkeeping Under Control - The Long Term Approach

Businesses in the UK are advised to take the long term approach to business finances and bookkeeping according to West Sussex based Chartered Accountants, James Todd & Co

Bookkeeping is an essential function of any business. Still, increasing time pressures, a lack of capacity or relying on outdated paper-based records can spiral out of hand, where owners simply don't have the know-how or space to dedicate days – or weeks – to bring bookkeeping up to date.

While a few missing receipts or bank reconciliations may seem minor, this can rapidly develop into a business-critical challenge, particularly when reporting obligations and tax returns are repeatedly late or subject to material errors.

James Todd & Co, accountants in West Sussex specialising in business services, explains why poor bookkeeping is such a significant problem, why it happens, and what you can do to get back on track.

The Numerous Issues Caused By Disordered Bookkeeping

Managers, leadership teams and business owners rely on bookkeeping to provide timely and accurate information – ensuring that reports, forecasts and figures are up-to-date and error-free, presenting a true picture of company performance.

Bookkeeping isn't purely an administrative exercise necessary for preparing statutory accounts or submitting tax declarations but feeds into every aspect of running an organisation, such as:

• Managing cash flows and identifying financing requirements to avoid late or missed payments.
• Planning future acquisitions, purchases and inventory orders for customer continuity.
• Running staff payroll, accounting for overtime, absences and bonus payments.
• Forecasting sales, profits and outgoings to make clear judgements about the best way to keep a business progressing.

Cash flow complications can be extremely serious, where a company owner may not realise they have no funds to pay an overdue bill or cover mortgage or rental repayments, with the worst-case scenario being potential insolvency proceedings or legal complaints.

This occurrence is perhaps more frequent than many clients imagine. Scenarios include businesses that offer clients payment terms yet fail to track payment due dates, chase late remittances or assess how incoming payments align with outgoing liabilities.

Other instances relate to lost revenues, where a business has forgotten to invoice a client and, therefore, mitigated its turnover and profitability while creating reputational damage where customers recognise a level of disorganisation.

Fortunately, a professional accountancy and bookkeeping team can help – getting your books back into good order and implementing processes and oversight to prevent these issues from developing or recurring.

How Can Business Owners Pre-Empt Disorganised Bookkeeping?

There are several warning signs that your bookkeeping is not keeping pace with the business, which may be the first indication that you need to take a proactive stance in tackling your bookkeeping before it becomes more complex to put right:

• Bank accounts are not reconciled regularly, and you do not know your business account balance.
• Balance sheet liabilities are unreliable, and you cannot verify totals owing to creditors, lenders or commercial landlords.
• There is no established breakeven point the business aims to meet, and you are unsure whether you are making a profit.
• You cannot confirm whether all customers have been invoiced or billed, whether all accounts have been paid up to date, or whether overdue accounts have been chased.
• Profit and loss accounts from your bookkeeping software are unreliable and cannot be used for astute decision-making.

These problems usually arise because small businesses and owners have very limited time. While answering enquiries and shipping orders is the priority, bookkeeping falls further down the to-do list.

Growing companies can also be victims of their own success without the administrative and financial workforce capacity to cope with increasing volumes of transactions, customers, products and payments in and out of the organisation.

If any of these scenarios apply to you, or you have no confidence that your bookkeeping is in a good position to help you run your business smoothly, the first step is to speak to our friendly, efficient accounting clean-up team.

How to Resolve Outdated and Unreliable Bookkeeping

Data entry, reconciliations and expense filing can quickly build up. Not only does that mean inaccurate bookkeeping and reports, but greater exposure to manual errors. Rushing or trying to catch up with a month of bookkeeping overnight is never a great solution and will almost always mean mistakes that can cause further problems.

James Todd & Co. provides an accounting clean-up service – which is exactly as it sounds.

Whether you need immediate help resolving outdated bookkeeping and getting back up to speed with your tax and VAT reporting, accounts payable or cash flow, a professional team can step in and work diligently to ensure every transaction and event has been accurately recorded and logged.

Once you have regained control of your bookkeeping and big-picture financials, we also assist in looking at ways to improve your processes and internal controls, giving you the assurance that your reporting systems are dependable.

What happens if we discover a major mistake?

In most instances, a mistake can be corrected there and then. However, if this affects your financial returns or tax filings, we can liaise with HMRC on your behalf to report the error and make corrections as necessary.

We can then work with your internal teams to bring any outstanding filings or returns up to date, clearing a backlog of pending submissions and removing ongoing interest penalties and fines issued by HMRC and Companies House.

Creating Efficient Long-Term Approaches to Small Business Bookkeeping

Our objective is to provide tailored, informative advice. Following an accounting clean-up, the next step will depend on your overall position and ability to follow updated processes to keep your financial records in good order.

Some clients resume responsibility for their bookkeeping and break down these tasks into manageable chunks, completing entries and reconciliations daily or weekly to ensure they do not end up with an overwhelming workload again.

Others delegate certain aspects of their bookkeeping to the team on a recurring basis. We can manage monthly or weekly payroll processing, general bookkeeping and management and statutory accounts processes.

These bookkeeping services are an investment in business efficiency and can be a huge relief, ensuring your finances are in safe hands, and you have the certainty that whenever you need to make an important decision, your bookkeeping software will be entirely accurate.

For more information about accounting clean-ups and other assistance with bookkeeping backlogs, please get in touch at any time for an informal discussion.

Read more about James Todd & Co - Adapting Business Payroll and HR to Flexible and Hybrid Working 

About James Todd & Co

James Todd & Co have been providing accounting services for more than 30 years across Chichester, Farnham, Lavant, and Sussex and Hampshire businesses. Their clients trust them to provide bookkeeping, financial auditing and compliance, management accounting and financial advisory services.

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Source Company: https://www.jamestoddandco.co.uk/