For many SMEs, bookkeeping is seen as a tiresome chore rather than a key function in running a small business.
As a result, the process of filing and managing business accounts can be too easily brushed aside. As Mark Twain once said: “Never put off until tomorrow what you can do the day after tomorrow.” It’s all too easy to delay basic administrative duties until the point when they really have to be done.
In the aftermath of the Self Assessment deadline, an industry expert has highlighted the importance of effective bookkeeping. The timing is apt after HMRC received a record 572,455 online returns on the January 31 deadline. It’s a good job their servers were robust enough to bear the burden!
Sara Rizk, editor of advice site Startups.co.uk, warned of a renewed ruthlessness from the Revenue in regards to inadequate filing, and the increasing importance of good bookkeeping.
“If you don’t have the best skill to do it yourself then you should really get someone on board who does. You just need to be meticulous about the records that you keep – you can’t let anything slide,” she said.
“It’s probably advisable to spend half a day or so each week to keep on top of it, so you’re doing it as you go as opposed to having to do everything at the end of the year, when mistakes happen.”
Business owners, whether they be freelancers, contractors or small enterprises, tend to find the administrative part of running a business an unwelcome distraction from their work. That’s why most company owners employ the services of someone to look after their accounts and do their tax. Here at Crunch, we’ve had a number of our customers utilise the expertise of our accountants to get their self-assessments done (more stats on this later) so they could negate the hassle of doing it themselves.
Quite simply, people don’t usually start up a business because they like accounting. Unless it’s an accountancy firm that is. That’s why we think most small business owners want a complete accountancy service which offers them accounting software, their own personal account manager (to help them with simple day-to-day processes) and unlimited access to qualified accountants, all in one place. We recognise the increasing importance of good bookkeeping for limited companies, so we ensure it’s a doddle for all our customers.
We’ve previously reported on Crunch Watch about HMRC’s widened remit to penalise poor bookkeeping. The initiative will target 50,000 of the worst offenders for “significant record-keeping failures.” The Revenue estimates that 40% of all SMEs suffer from poor record-keeping, and unpaid taxes are likely to be due from these same businesses. However, even if you’re not found guilty of having unpaid taxes, you can still be fined: the reason being that HMRC want to tackle the root cause of unpaid taxes – and in many cases they believe this is simply shoddy record-keeping.
For more information on HMRC’s ‘Business Records Checks’ access their consultation document by clicking this link.