What is bookkeeping?

Kathryn Barnes Guidon Group Stockton Accountant

What is bookkeeping?

If you run your own business, you need to look after your accounts: that’s the money-side of things. It can mean looking after your cashflow, invoicing your clients, chasing payments or paying bills among many other things.
An essential part of that is keeping your books. Bookkeeping for small businesses can feel like a real chore and cause a lot of undue stress. Many small business owners can be confused about what makes up their books, especially if they can’t afford to employ a member of staff to look after them.
Some business owners might also mistakenly think that their accountant will look after their books as part of their basic service.
At Guidon Group we offer bookkeeping as part our services and will discuss the level of service you require at our free initial consultation.

What’s the difference between bookkeeping and accounts?

Bookkeeping is the daily task of recording and monitoring financial transactions and information. And while an experienced chartered management accountant like Guidon Group’s Tony may be more than capable to keep books, it isn’t their specialism. Accountants interpret, analyse, report and summarise financial data. For them, the devil is in the detail and they are managers of the money.
But without having the data correctly recorded, an accountant will have real problems because they won’t have anything to analyse and that makes their job of advising you very difficult. That’s where bookkeepers come into it: they monitor the money.
If you’re a small business or SME and don’t employ someone you can, as I’ve mentioned, ask your accountancy firm to look after your books for you. At Guidon Group, I use my 20 years of experience in bookkeeping to offer an efficient service, and it means you don’t have to worry about that task. It frees you up to concentrate on your business!
But I meet a lot of business owners who, whether they look after their own books or not, are intrigued about what bookkeeping is.

Bookkeeping tasks

Bookkeeping is a way of recording and tracking the numbers involved in your business. It is essential and good bookkeeping means that you will know how your business is performing and the correct amount of taxes that you need to pay.
The person or people responsible for bookkeeping will look after, among other things,

  • Inputting invoices from suppliers
  • Recording receipts
  • Raising customer invoices
  • Chasing customer debts
  • Recording petty cash
  • Reconciling the bank account

Why bookkeeping matters

Without bookkeeping, you won’t understand how well your business is really functioning! You need to keep up-to-date records of what cash is coming into and out of your business, what you are owed and what you owe. Knowing this information is key to the survival of your business. After all Cash is King!

Traditional bookkeeping vs modern bookkeeping

Bookkeeping is an integral part of accounts, as I have mentioned, and it gets its name from back in the day when people used physical books called daybooks to record their transactions, i.e. they used to keep the books.
Nowadays thanks to modern technology you don’t have to sit and write it into physical books any longer or worry about losing the paperwork! Software has developed rapidly over the years with companies such as QuickBooks using the cloud to record your financial information securely.
In fact, with smartphones, you don’t even have to worry about taking your receipts back to the office as you can just use the app to take a photo of the receipt and it will be recorded within the software!

While technology is making bookkeeping an easier task, it’s still something you cannot ignore. We will be running courses in the future that explain more about bookkeeping. But if it’s something that you don’t have time for and can’t afford a full or part-time employee, why not ask us about our bookkeeping services today! You can email me for more details or give me a call on 01642 927265.