Bookkeeping skills might not be the most exciting part of running your business, but it’s absolutely critical. Done well, it helps you make better decisions and means you avoid year-end panics.
The good news is you don’t need formal training to get started. With the basics in place, you’ll spot issues before they grow and identify opportunities you might otherwise miss.
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Let’s start by understanding what a bookkeeper is responsible for. In simple terms, a bookkeeper records all of your business’s financial transactions. This includes sales, expenses, purchases, receipts, and payments. Theirjob is to keep your records up to date, accurate, and organised, so you know where you stand financially at any time.
Bookkeepers also carry out tasks such as managing your invoices, reconciling your bank accounts (checking records match with your bank statements), and preparing information for your accountant at tax time. If you’reVAT registered or pay payroll, they will maintain these records as well.
Think of record-keeping as the foundation for everything else in your business numbers. Without accurate bookkeeping, your profit, tax, and cash flow figures may be wrong, putting you at risk of HMRC penalties and making it harder to grow.
Bookkeeping and accounting are closely linked, but they’re not the same. Bookkeeping is all about recording day-to-day transactions and keeping your financial paperwork in order. Accounting takes that information and uses it to prepare financial statements, calculate tax, and help you make strategic business decisions.
Put another way, knowing bookkeeping skills is where you record the numbers; accounting is where you analyse and act on them. Both are important and, as your business grows, you may move from doing everything yourself to working alongside a professional to interpret and plan using your numbers.
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Many small business owners manage their books themselves when starting out. Here’s a straightforward approach to getting it right:
It sounds obvious, yet it’s a common mistake. Always use a dedicated business bank account. This makes it much easier to track your incomings and outgoings and avoids confusion later.
Log sales, payments, expenses, and receipts as they happen. Waiting and trying to “catch up” before a deadline leads to missed items and errors. Use spreadsheets or, better still, cloud-based accounting software for realefficiency and less risk of mistakes.
Retain all invoices and receipts, either as physical copies or (preferably) scanned into your digital accounting system. Many platforms let you upload receipts on the go.
Make sure you know what’s owed to you and what you must pay out. Note due dates for each to keep your cashflow healthy and avoid late payment fees yourself.
Once a month, match your records to your bank statements to make sure everything’s been captured correctly. Accounting software often makes this as simple as clicking a button.
With tax and VAT deadlines, it’s vital to know which period each payment relates to. Keep all documents sorted by month or quarter to make self-assessment and VAT easier.
Whether monthly or quarterly, check your business’s financial performance, not just your balance. This lets you spot trends, potential issues, or missed deductions early.
You don’t need to be a finance whizz to get the basics right, but you do need some essential skills:
Attention to Detail: Accuracy matters. Even small mistakes can add up or cause problems with HMRC.
Consistency: Get into the habit of recording transactions and reviewing your books regularly.
Organisation: Store your paperwork in a logical system. If using cloud software, label uploads clearly.
Numeracy: Comfort with simple sums and basic reporting.
Familiarity with Bookkeeping Software: Cloud-based tools like Xero and QuickBooks help you automate and simplify these tasks. Not sure which to pick? Check out our comparison of
quickbooks or xero
Understanding of Key Deadlines: Know when your VAT, tax return, and payroll submissions are due so you can prepare in advance.
DIY Bookkeeping vs Professional Help: Which Is Right for You?
In the beginning, many business owners choose to handle bookkeeping themselves. This works if you have the time and your business is straightforward – perhaps it’s just sales and a few expenses each month. It saves money and gives you greater insight into your numbers.
However, as your business becomes more complex or time gets tighter, there’s nothing wrong with handing things over to a professional bookkeeper or quarter accountants.
Professional support often saves you more than it costs by catching costly mistakes early, claiming the right business owner deductions, and freeing up your time for sales or service work.
You might also choose to get an expert review at year-end even if you manage your books day to day, as a “health check” for HMRC compliance and peace of mind.
While you can absolutely do your own bookkeeping, especially when starting out, look for these signs it’s time to get professional help:
Having a professional involved doesn’t mean you lose control. In fact, it often leads to more clarity and timely insight, with your records organised in a way that makes every year-end and tax deadline less stressful.
Getting to grips with basic bookkeeping skills is one of the best investments you can make as a small business owner. The right habits now will save headaches, stress, and potentially cash later by making sure you never miss deadlines or business owner deductions.
Whether you choose to keep things DIY for now or explore professional support, the most important step is to start building these good habits as soon as possible. Our team of local accountants in Bedford at The Numbers Quarter is always here if you want advice on making bookkeeping feel less like a chore and more like a source of business confidence.
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