Many small business owners don’t understand the difference between a Bookkeeper and an Accountant which is understandable, as the roles are very close. The ideal solution is to have both.
What a Bookkeeper does………..
A Bookkeeper will record all past income and expense that a business has generated, often on a weekly, monthly or quarterly basis. A good bookkeeper will always reconcile business bank accounts regularly to ensure nothing is missed. VAT will be recorded, with the VAT returns calculated and submitted to HMRC as required. Payroll will be processed and entered into the bookkeeping system correctly if applicable. Regular reports will show the business owner how their business is performing with up to date information that can help them with important business decisions that may have to be made such as when and how to grow.
What an Accountant does….
An Accountant will take the figures that have been recorded by either a bookkeeper, or the business owner and prepare a set of ‘End of Year’ Financial Accounts. The figures from these End Of Year accounts will be used to calculate and submit either a self-assessment to HMRC for Sole Traders and Partnerships, or to Companies House when a business is incorporated (Limited), along with a Corporation Tax calculation. An Accountant will also help to ensure the business is taking advantage of any tax benefits that may be available and help with forward planning.
Where Bookkeepers and Accountants cross over
The crossovers happen with some bookkeepers offering end of year accounts preparation and self-assessment submissions, plus some accountants offering in-year bookkeeping, VAT returns, Payrolls and management accounts as additional services. Although this can offer the customer a one-stop shop, it’s not always the best solution. Bookkeepers are good at Bookkeeping, Accountants are great at End of Year Accounting and are equipped to offer advice on items such as tax planning.
Bookkeepers are often not as experienced as Accountants when it comes to End of Year and forward planning – and then Accountants aren’t necessarily good at doing bookkeeping!
The best solution is to have a bookkeeper doing the in-year and an Accountant doing the end of year.
This doesn’t mean it has to be expensive. A bookkeeper can save you money by:
- making sure you’re claiming everything you’re entitled to claim
- saving you the time and stress of doing this work yourself, freeing you up to earn more money doing what you’re good at.
- Giving you up to date regular reports of all your income and expense trends so that you know where the business is exceling and where it may need tweaks or improvement.
- Working closely with your Accountant, often resulting in a lower bill from them, as they know figures are correct and only need minimal checking and adjustment.
Why is Lady of Ledger Different from other Book Keepers?
Lady of Ledger has been trading since 2004 so has over 14 years of experience with many different types of professions. We are insured and licenced under the International Association of Bookkeepers. We’re a friendly team that works hard at offering a modern and plain language service.
We scan all paperwork into the accounting software, so that you, and indeed anyone else you choose to allow, will have the opportunity to view this from any internet enabled device.
We work exclusively with QuickBooks Online (QBO) software, this means we know the software inside out, and in the unlikely event there’s something we don’t know, we can liaise directly with QuickBooks – thanks to our Gold ProAdvisor status membership following our Advanced Certification Training.
Why not have a read of many of our customer testimonials – we’re very proud that many of them mention our confidence and knowledge as the main reason they chose us from others in the first place – and why they stay with us.
Many small business owners don’t understand the difference between a Bookkeeper and an Accountant which is understandable, as the roles are very close. The ideal solution is to have both. What a Bookkeeper does……….. A Bookkeeper will record all past income and expense that a business has generated, often on a weekly, monthly or quarterly
If your business is VAT registered, with a rolling 12 months turnover above £85,000, did you know that from April 2019 it will be mandatory for you to keep digital records in relation to your VAT compliance?
HMRC is introducing Making Tax Digital for VAT from April 1 2019. No longer will you be able to keep you bookkeeping records in a book, on pieces of paper, or even to some degree on a spread sheet. You will no longer be able to log in to the HMRC portal and file your VAT return into HMRC’s website – you will be obliged to file through accounting software such as QuickBooks Online.
HMRC will not be developing their own in-house software like they do with PAYE (Basic Tools) etc., companies are going to have to rely on accounting software solutions that are on the market.
How to Prepare for Making Tax Digital
• Talk to your bookkeeper or Account and see if your current software – if you have any – is it HMRC ready? If so you are good to go!
• If you still use spread sheets or manual bookkeeping, the easiest way is for you to move to a software package such as Intuit QuickBooks.
• If you are not ready to take on keeping your records electronically and using software then you need to get some professional help. Many businesses find that outsourcing their bookkeeping is just one less headache for them, freeing up time and reducing the stress.
• Using an accounting software will record all of your business transactions and file your VAT return direct to HMRC.
• This needs to be set up and running correctly ready for your first full VAT return after 1st April 2019. For example, the first quarterly VAT returns to have to be compliant with this are your April/May/June returns that have to be submitted by 7th August 2019.
Benefits of Using Accounting Software
So is Making Tax Digital a bad thing? No, not at all! Once the adjustment has been made – there are many other benefits that the business owner can make the most of:
• Accounting software gives you even more advantages to the bog standard spread sheet. For example, daily bank feeds allow you to see who has paid you and what’s gone out of your bank without logging into your bank each time.
• With QuickBooks Online, you can get up to date, valuable reports at the touch of a button helping you to be more aware and make better decisions about the way you move your business forward. No more waiting until after year end to get this information from your Accountant.
• Invoices to your Customers can be sent digitally by email direct from online software packages, which you can access via any internet enabled device, such as computer, phone or tablet. This is ideal for businesses such as plumbers and electricians that may often want to give a customer an invoice for work completed before leaving – maybe even taking a card payment on the spot through the software or being able to set up direct debits from regular customers through the software.
How Much Does Accounting Software Cost?
With QuickBooks Online, for example, the monthly subscription can be as little as £12 per month for a VAT registered business. QuickBooks is fairly easy to learn if you want to carry out your own bookkeeping and VAT returns. For those that prefer to let a professional manage this task for them, the online software allows both the business owner and a Bookkeeper/Accountant to access the same file remotely – no need for you to have to set aside time to allow them into your office or having to and visit them.
If you’re a small business owner in Telford, Shropshire and want help to convert your bookkeeping to being Making Tax Digital Compliant, contact us now Tel 01952 350036 or email firstname.lastname@example.org.
If your business is VAT registered, with a rolling 12 months turnover above £85,000, did you know that from April 2019 it will be mandatory for you to keep digital records in relation to your VAT compliance? HMRC is introducing Making Tax Digital for VAT from April 1 2019. No longer will you be able