Small Business Support

Book-keeping

The energies of most SME owners are, quite properly, concentrated on running their businesses. Though it might appear a burden, keeping its accounts in good order is, however, essential to the profitable and efficient operation of a business. Whilst precise bookkeeping methods vary slightly from company to company, all businesses must observe certain rules and must include specific information when managing their accounts. Businesses with no employees Bookkeeping for businesses that do not employ any staff is reasonably straightforward, as they do not have to register for PAYE. However, there is still a basic level of important paperwork that a non-employer must complete each month. There needs to be a clear, easy-to-manage record showing when invoices were issued and when invoices were paid by customers or clients. Not only will this help a business keep pace with invoices that are overdue, it will also simplify the process of calculating VAT payments if the business is registered. The same strictures apply to all invoices the business receives and pays, be they from a supplier or from a utility company. Every receipt or bill must be kept, accompanied by a settlement date. Although not compulsory, using a computer spreadsheet will make bookkeeping both speedier and easier. The spreadsheet should at the very least indicate income received, payments made and any VAT to be declared for that quarter. Employers Matters are more involved for businesses that employ people. As well as its own financial affairs, the company must handle the tax and payment arrangements for its staff. In practice, this means deducting employees’ tax, paying their National Insurance Contributions, accounting for any bonus payments, dealing with business-related expenses and managing any company pension schemes. Computerised account keeping is pretty much vital for employers. Most accounting software packages not only ensure that the entire system is efficient and accurate, they also help businesses in other areas such as mapping out profit and loss charts, monitoring payment dates and controlling stock. Bookkeeping for employers, however, is not quite the huge administrative task it might at first look. Each financial year has its own structure and this in itself helps to organise matters and to ease any pressures. Throughout the year, employers must deduct the appropriate amount of PAYE from employee earnings and pass these on to the relevant Inland Revenue accounts office by the set date, depending whether the payments are to be made on a monthly or quarterly basis. The same must be done for National Insurance Contributions. A record must be kept of all employee earnings, PAYE and NICs, and this must match the payments made to the Inland Revenue. VAT must be declared and paid every quarter. At the end of the company’s accounting year - whenever that falls - the business must submit a formal return covering its accounts to the Inland Revenue.


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