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Inspirational Quotes

Bookkeeping

Wed, 26 November 2008

Everyone in business plans to make a profit, but how do you know if you are making a profit?
Do you wait until the end of the year and give a pile of invoices and receipts to your accountant? You also need to ensure that you have enough cash available to pay your debts as they fall due. How do you know whether you are in that position? Do you just keep your fingers crossed? Or do you address both of these issues by keeping track of your financial position on a regular basis?
 
Objectives
Keeping good records of account is very important. Indeed, self-assessment for income and corporation tax now makes it a legal requirement. Your accounts will tell you how much money is owed by and to the business (ie your debtors and creditors); and how much money has actually been received or paid out by the business. Keeping good records will help your accountant at the end of year to prepare your annual accounts. Keeping good records will help you with your VAT returns - if you are registered for VAT. Lastly, keeping good records is very straightforward. This, and the Related Posts below, set out to make the process as simple as possible and by following the instructions you will be able to:
 
• keep accurate books of account;
• undertake a bank reconciliation every month;
• prepare a monthly operating statement; and,
• prepare your quarterly VAT return.
 
The information provided on this topic is intended as a starting point only. We would recommend that you seek advice from your business adviser if in doubt.

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