When it comes to finances, many individuals and businesses can find it a bit overwhelming. There is a lot of information out there, and often Chinese whispers can occur. At times information can get mixed up or misunderstood. Here at McCarthy Browne Bookkeeping, we aim to help you with your finances and ensure that things are made as simple as possible for you. That’s why I have decided to bust some of those Bookkeeping myths.
Myth Number1. My tax return must be submitted in January each year.
This is one of the biggest myths out there. Some businesses have come to me and thought that the only time of year you can submit a tax return, is January. This is wrong.
Tax returns can be submitted any time after the financial year ends. So from April, right through till the January, you are able to submit your tax return. In fact, often the earlier you submit it, the better, as it leaves you plenty of time to save and pay that tax bill.
Myth Number2. You will lose control over your finances if you delegate to a bookkeeper.
Another myth floating around is that you won’t have financial control if you hand over your finances, receipts and books etc to a bookkeeper. This is also wrong.
If you choose to delegate your books to a professional qualified bookkeeper, you will not lose control over your finances. If anything, you will end up seeing your finances clearer than ever before.
Bookkeepers are able to create a much better forecast of financial matters, and keep a better eye on your profit and losses. This ensures you don’t reach a state in your finances, without realising, particularly if you are busy dealing with other areas of your business.
Myth Number3. Do- it- yourself software, such as Quickbooks, is easy to use so I may as well do my books myself.
Often businesses believe that if they sign up to an easily accessible, easy to use software and platform such as Quickbooks, that they can manage the accounts effectively by themselves. This is also strictly not true.
Although I’m sure many businesses would do a great job, professional bookkeepers have learnt their craft. They are knowledgeable with the theories that support it. They are qualified and fully compliant with tax legislation. This means you can submit your tax return to the HMRC with the reassurance that it has been dealt with by an expert.
Data entry, which can be done by many people, is not the same as bookkeeping. A bookkeeper knows exactly what is and isn’t allowed for tax purposes and can categorise everything accordingly. Once those numbers have been entered in to Quickbooks, most people are unaware of the meaning behind them. A bookkeeper can ensure that everything is accurate, as a simple slip up could end up costing your business.
Myth Number4. Why should I hire a bookkeeper when I could get an accountant? Isn’t bookkeeping just a cheap version?
This is also wrong. These are two different professions, although there may be a couple of cross over’s. An accountant analyses business performance, deals with budgeting, produces financial reports and deals with individual and company tax returns.
Whereas a bookkeeper, deals with more of the everyday financial situations. They help to process receipts and bills, deal with payroll, record business transactions and deal with invoicing and chasing payments. Here at McCarthy Browne Bookkeeping, we can also submit those tax returns. You see, what a bookkeeper does is essential foundation work for an accountant.
Also a lot of small businesses and sole traders don’t need an accountant and a bookkeeper will be enough to get the finances together ready for the all-important tax return.
Myth Number5. I don’t earn enough to warrant the need for a bookkeeper, or my business isn’t big enough.
This could fall down to personal preference. But when it comes to running a business, there is so much to keep on top of, from finances, to admin and then actually doing what you and your business is an expert in.
Even small businesses or sole traders, will benefit with the use of a bookkeeper. Think of the overwhelmed feeling you feel when it comes to facing the finances. Think of the dread you feel in the pit of your stomach when the words “tax return deadline” are mentioned.
The benefits of a bookkeeper will be endless. From their eager eye catching where savings could be made, to being knowledgeable in the field so they know exactly what needs to be included in the self assessment tax return, right through to saving you valuable business time through delegating these dull tasks.
Did you know that most small businesses and sole traders end up SAVING money when they use a bookkeeper? If a bookkeeper isn’t used, businesses can end up paying far more tax than they need to.
Myth Number6. Bookkeepers are stern and unapproachable.
This is the biggest myth of all. A bookkeeper’s intensions are not to scold you. We are here to utilize the software, such as Xero and AutoEntry, to provide data and analyse it for you so that we can interpret the results and help you to get your finances to work for your business.
Here at McCarthy Browne Bookkeeping, I am passionate about numbers, but I am also passionate about helping your business. So although I can’t completely vouch for all bookkeepers, I can put your worries to rest. If you have any questions when it comes to bookkeeping and your business finances, please do drop me an email and I would love to help you.