Accountant Online

Bookkeeping involves keeping track of your financial records.

Bookkeeping is the process of recording business transactions, such as invoices, bank statements, and receipts, and entering that information into a database The documents collected are then used to calculate the business’ tax returns and financial statements We recommend using accounting software using online bookkeeping tools like Xero Check out our What Is Accounting Software? guide for more information

Sole Traders and Limited Companies need to do regular bookkeeping so you can file accurate tax returns and financial statements

Accounting involves reporting, interpreting, and analysing the finances in your business.

Accounting is more complicated and technical than bookkeeping Many of our clients do bookkeeping in-house or use online bookkeeping software but outsource their accounting requirements A professional accountant helps to ensure that your Revenue and Companies Registration Office deadlines, such as the annual return filing date, are being looked after

Accountants may oversee your bookkeeping They make sure the records are maintained correctly but they don’t usually carry out any data entry Your accountant will prepare technical accounting duties like preparing profit and loss accounts, balance sheets and filing your tax returns

Bookkeeping terms to know

Get familiar with these terms if you're managing a business Even if you outsource to an online bookkeeping service provider like Accountant Online, it's useful to know what these terms mean

• Bank reconciliation This is the process of comparing your sales and expenses against your bank account
• This ensures that the correct amounts are coming in and out
• It’s used as a verification check

This is the process of comparing your sales and expenses against your bank account This ensures that the correct amounts are coming in and out It’s used as a verification check

• Accounts payable Any outstanding payments to your suppliers are categorised as your ‘accounts payable’
• If you have a supplier or vendor that you haven’t paid yet, they will need to be organised and managed to ensure they are paid on time

Any outstanding payments to your suppliers are categorised as your ‘accounts payable’ If you have a supplier or vendor that you haven’t paid yet, they will need to be organised and managed to ensure they are paid on time

• Accounts receivable This is the money that is owed to the business
• This occurs when your business provides goods or services, but payment is not due until a later stage
• If you don’t offer any goods or services on credit or you are a business to consumer (B2C) business, you may not come across this term

This is the money that is owed to the business This occurs when your business provides goods or services, but payment is not due until a later stage If you don’t offer any goods or services on credit or you are a business to consumer (B2C) business, you may not come across this term

Why do you need books and records?

Businesses and individuals must keep a record of any paperwork used for calculating taxes This includes bank statements, invoices, and receipts received during the year, i e any money received or paid out by the business

You need to maintain these books and records so you can calculate your tax liability each year Similarly, if you have an accountant, they will need all your books and records to prepare your financial statements

A complete business record should contain details explaining transactions, and having the correct invoice/receipt for each transaction

As a Xero firm, we have the expertise and experience to help you with online bookkeeping services Most of our clients work with Xero software rather than physical books, making running a successful business more efficient, smooth, and secure If you’re not using bookkeeping software, talk to our Client Services Team about taking your books online – we’re here to help

Types of documents needed for bookkeeping

• Sales and purchase invoices/receipts
• Bank and Visa statements
• Payslips and wage sheets
• Stock / ecommerce / Point Of Sale (POS) reports
• Verification records for assets such as property, machinery or vehicles
• Cash books and receipts In general, all books, records, and documents relevant to your business need to be kept for six years Revenue has extensive powers to inspect your records and it is an offence if you or your employees fail to co-operate with Revenue in relation to the inspection of your records

For peace of mind that your records are secure and always up to date – start using online accounting software for easy data management

We recommend doing your bookkeeping online, which means moving away from Google Drive or Dropbox as a data management tool and using cloud-based software that is specifically designed for managing small business financials