The basic idea of balancing the books is to ensure that the totals you have for incomings and outgoings are correct and everything is in order. This is very important because the figures will be used for all kinds of financial reports and to calculate whether the business is making a profit or a loss. You'll also need clear accounts when you have to submit them for tax reasons. If the numbers don't add up, you could face a host of potential problems.
Many businesses make accounting and balancing tasks more difficult by not having clear, well organised records. This is crucial and should be something that every business does. A record of everything should be kept, including receipts, invoices and cheques. There should be notes on each of these to explain what they are for and the date they were either issued or received. This makes it easier to trace financial information if you need to and means you won't miss any figures out when you do those all-important calculations.
Clear accounts need to be kept for six years before being archived. In some cases they must be kept even longer, especially when it comes to transactions that cover multiple accounting periods. If you are self employed, you should keep records for five years after the submission deadline for the appropriate tax year.
When businesses first start out, they should have clear accounting practises in place. This is crucial and can potentially save them a great deal of money. Hiring an external accountant or bookkeeper is a wise idea; some businesses avoid hiring accountants because of the perceived expense, but making savings by cutting essential services is a false economy and can lead to more costly issues in the future.
We provide a flexible range of accounting services throughout Worthing for businesses of every size. We can provide data entry and get all of your incomings and outgoings arranged in a clear, accessible manner. At the same time we will balance the books for you and can produce statements too.