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Financial Record Keeping

Financial Record Keeping

I have had the pleasure of working in finance for over twenty-five years and in those years have gained a lot of experience in bookkeeping. Having also run my own practice for the last six years I have my own way of doing things. So, I wanted to share with you a few of my ideas and tips. I hope you find them helpful.


Legal Requirements

As a freelancer, self-employed person, proprietor, small business owner or limited company, you are legally required to keep accurate financial records and expenses.  All records must be kept for a minimum of six years.

Banks Statements

I know a lot of accounts packages like Xero or Sage have live bank feeds, which download your bank transactions straight into the software. This makes bank reconciliations really easy. However, your bookkeeper still might need hard copies of your bank statement to reconcile too.

Get into the habit of downloading your bank statements on a monthly basis.

Put a reminder on your computer at the end of the month maybe. 

Make sure you make notes on your statements for unusual transactions. 

The more information you give your bookkeeper the easier it is for them.

Expense Receipts

Keeping track of your receipts is always a bit of a pain.  You either stuff them in your purse or car door and forget about them or lose them altogether.

My tip is to maybe get into the habit of scanning them straight after purchase. You can get apps for this or take a photo with your smartphone.

There are lots of apps and packages that link to other accounts packages like Xero that will upload a photo or PDF to your transaction. This definitely helps your accountant.

Ask your accountant which ones they like.  The more organized the filing of your paperwork and receipts are, the less it will cost you for bookkeeping.

I Love A Good Spreadsheet

Rather than manual recording, something that I use a lot are simple spreadsheets. Keeping a tally of income and outgoings makes doing your self-assessments and returns a lot easier.  On the left side record your income with a brief description and on the right-side record purchases.

You can add columns for different expenses like, mileage, travel, car costs, stationery etc. This helps your accountant or bookkeeper to produce a profit and loss for your Year End reports.

Invest in Some Stationery

Invest in some stationery, either a A4 lever arch file or a clip file is good.  Buy some polyethene pockets, label them by month and get into the habit of putting your receipts into the pockets when you get home.

In the lever arch file, you can also keep a record of your sales invoices and your bank statements. A record of your HMRC log in and UTR details are also handy to keep in your accounts file.

Xero Setup and Conversion

Xero Setup and Conversion

With Making Tax Digital coming up in April 2019, changes are afoot for VAT registered businesses with a turnover over £85,000.  From April 2019 they will be required to have digital records and submit VAT returns digitally.

If you are thinking of moving your current accounts system over to Xero, and not sure where to start or what is required. As a Xero Accredited Advisor, I can help you with that and more. You can convert to Xero from most accounts’ software including Sage50c, Farmplan and Key Prime.

I travel to your office and set you up with a new Xero account and convert all your accounts details over to the new system. This usually takes less than a day to do.


The Service Will Include the Following Processes

  • Set up Xero data, organization and business details
  • Create a customized chart of accounts in line with your business
  • Import and customised invoice settings
  • Setting up live bank feeds from your bank accounts
  • Import all contacts (customers and suppliers)
  • Make sure conversion balances are correct
  • Import data from the old system to new

All this can be done by BP Business Consultancy

For more information contact us today.

Myth Busting – The Difference Between Bookkeepers and Accountants

Myth Busting – The Difference Between Bookkeepers and Accountants

We all know that bookkeepers and accountants are a necessary business function, but do we really understand who does what and why, and what the difference is? Why do we need one and not the other or do we need both?

Broadly speaking bookkeepers are primarily concerned with accurately recording your financial data, while accounting involves interpreting and reporting and summarizing that data. 

Let’s go into it in a bit more detail and define the roles of each.

What Do Bookkeepers Do?

Primarily the role of the bookkeeper in your business is to record financial transactions using an accounts package like Xero or Sage.

They will process all your purchase invoices, matching to dispatch notes or delivery notes, and reconcile supplier statements. Then some make payments to suppliers too.  They will also raise sales invoices, chase payments and send customer statements out. Some bookkeepers process all your bank transactions onto an accounts system and reconcile your bank account.

Bookkeepers will also prepare VAT returns, run payroll, process CIS payments and file self-assessment returns. They reconcile accounts up to trial balance level and can rarely prepare management accounts.

They also turn a pile of messy papers into something ordered and accurate.  They work on a daily, weekly or monthly basis as required for your size of business. A good bookkeeper is a valuable asset to a business and should not be seen as an unnecessary cost.


What Qualifications Should Bookkeepers Have?

Ideally, you should be hiring a qualified bookkeeper. They are accredited with the Institute of Certified Bookkeepers (ICB), the International Association of Bookkeepers (IAB) or the Association of Accounts Technicians (AAT Bookkeeper).

All qualified bookkeepers have a practice licence and are regulated by all AML legislation and compliance. Always check with your bookkeeper that they are practicing under a licence.

What Do Accountants Do?

An accountant mainly deals with higher level compliance things such as filing accounts and annual returns at company’s house, and corporation tax computations. A good accountant should be advising you on the strategic planning of your business to minimise business and tax liabilities and to help with cash flow.

Surprisingly anyone can call themselves an accountant.  However, the title “chartered accountant” indicates that the person has undertaken in-depth training, passed a series of rigorous examinations in financially management, auditing, business strategy and taxation, and committed to continuing professional development CPD to keep their skills up to date.

A chartered accountant is the only type of accountant that can audit your accounts. You only need a chartered accountant if you require audited accounts.  Lots of companies have their accounts audited, but in reality, you only have to have them audited if your turnover is over £5.6 million.

AAT Qualified Accountant

Bridging the gap between a bookkeeper and a Certified accountant is an AAT qualified Accountant (MAAT).

The AAT Diploma in Accounting is a 3-year semi-professional qualification and AAT qualified accountants can usually do as much as your accountant can do.

Only a Chartered Accountant can audit accounts.

What qualifications do Accountants have?

Accountants in practice usually chartered or certified accountants.

They are usually a Chartered Certified Accountant (ACCA), Associate Chartered Accountant (ACA), or Institute of Chartered Accountants (ICAEW).

Accountants in business are usually Chartered Institute of Management Accountants (CIMA).  An accountant may also become a Chartered Tax Advisor (CTA).

In Summary

When running a business, you probably will want both a bookkeeper and an accountant. Or if you are a small business, an AAT qualified accountant is probably enough.

The chart below gives a good quick reference guide for comparison.

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