Bookkeeping

Bookkeeping

 

BOOKKEEPING CASE STUDY

How to Grow your Business from £55k to £1.9m Turnover

Overview

Through recommendations, Mr Salesman approached VF Accountants. During his first year of trading, his company was generating some £55,000 turnover. He was writing down his sales in a small booklet. He was frustrated and spending several days every week trying to sort out his paperwork. His disinterest, lack of confidence and knowledge in keeping his business records were evident.

Approach

Our approach was not to overwhelm Mr Salesman. As we did not know how far his new business would grow, at the start, he was photocopying his sales pages and passing on all his purchase invoices to us.

Mr Salesman’s spirit shortly lifted and his sales grew exponentially. We set up spreadsheets with easy to follow headings for him to fill in his sales whilst we took care of the rest of his bookkeeping requirements.

Eventually, Mr Salesman became the Director and Shareholder of a second company. We subscribed him to QuickBooks Online to carry out his bookkeeping for both his companies.

Results

Bookkeeping done more efficiently

Focus on Mr Salesman Sales Aptitiude

Turnover from £55k

to £1.9m

Conclusion

 

It is so rewarding to see how far Mr Salesman has come from a small sales booklet to multi-million-pound businesses. We took over the bookkeeping side so that Mr Salesman could zone in on his uncanny sales abilities. He is transformed both personally and professionally.

 

Whether you are a Beginner Bookkeeper or have some knowledge of Bookkeeping, these FAQs should help you understand a bit more.

 

FREQUENTLY ASKED QUESTIONS (FAQ) ABOUT BOOKKEEPING

What is Bookkeeping?

 

Bookkeeping is a way to keep records of the financial affairs of your business.

Is doing Bookkeeping stressful?

Dividing your time between your multiple tasks as a business owner can make bookkeeping feel stressful. As such, most business owners prefer to leave the bookkeeping to VF Accountants.

What are the basic tasks performed in Bookkeeping?

The following are required to maintain the basic business records of a business:

  • Sales i.e. goods and/or services sold. Also known as Turnover.

  • Purchases i.e. goods and/or services bought.

  • Stock and work in progress.

  • Cashbook, where all money received and paid by the business, are recorded.

  • Reconcile, that is, check your Cashbook back to your Bank Statements.

  • Sales Ledger where all sums owing to the business are recorded. This is also known as Trade Debtors or Accounts Receivable.

  • Purchase Ledger which records all amounts due to be paid by the business. This is also known as Trade Creditors or Accounts Payable.

  • Details of any loans taken out.

  • Movements of transactions in a Director's Loan Account (for limited company).

What further work may be required in Bookkeeping?

 

Our clients often require us to carry out the above primary tasks for them. Furthermore, most of our clients like to see a clearer picture of their finances on a month to month basis. Thus, VF Accountants often carry out further bookkeeping entries:

  • Review:

    • Profit & Loss Account which summarizes Sales and Expenses to provide Profit or Loss for the period.

    • Balance Sheet which summarizes what your business owns and owes.

    • General Ledger which shows all the above categories.

  • Ensure Stock Valuation report matches back to Stock Asset in Balance Sheet.

  • Keep a Fixed Asset Register, that is, a list of property, plant and machinery which the business owns.

  • As these fixed assets are not expected to be converted into cash within a year, we spread these costs. This is known as Depreciation.

  • Post Payroll Journals where there are Employees.

  • Check Her Majesty's Revenue & Customs (HMRC) Tax Service for any Pay As You Earn (PAYE) Tax & National Insurance Contributions (NIC) to be paid.

  • If PAYE Tax & NIC is paid late, account for Interests on late payments.

  • Reconcile, that is, tie back Value Added Tax (VAT) in your books to VAT Returns and Liabilities.

  • Calculate and post Prepayments. A Prepayment is where you made a payment before you received goods or services, or before a debt is due.

  • Calculate and post Accruals. An Accrual is a charge for work done but not yet invoiced.

  • Update the Director's Loan Account and post Dividends. These are sums of money divided amongst Shareholders of a Limited Company out of its Profits after taking into account tax on the company.

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You may feel confused with the above Bookkeeping requirements. However, do not worry as VF Accountants are here to support you.

Why is Bookkeeping important?

As you can see, there is a lot involved in keeping your business records up to date. Like the foundation of a building, your Bookkeeping must be solid to be able to extract valuable information.

"Garbage In Garbage Out (GIGO)" i.e. if incorrect data inputted then wrongful information is provided

 

If you feel that you can accomplish all the requirements for Bookkeeping, then Bravo! 

Otherwise, VF Accountants can assist you to keep your business records up to date.

If you do not maintain good records, you will not show your correct income and outgoings. Thus, you could end up paying more tax than you should.

Need more details? Contact Us

We are here to assist. Complete Contact Form to see how we can work together.

 

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VF Accountants is the Trading Name of Prestigious Accounting Services Limited. Registered Office Address is 34 Beclands Road, London, SW17 9TJ. Registered Company Number in England and Wales is 07894410. VAT Reg No is GB128633802.

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