Small Business Bookkeeping Services in UK Making Audit Easy for Businesses

Managing financial resources for a small business is always difficult. On top of that if you have received an audit request from IRS it becomes even more frightening. The first thing a small business owner needs to do after receiving the audit notification is to take a deep breath and relax. An audit does not really mean that there is a loophole in your financial management; instead it means that the IRS has randomly chosen your business organization for examination on tax return. The verification will be on a close level to find out if everything is alright. During this time it helps to seek professional guidance from small business bookkeeping services in UK.

However, if you wish to survive the small business audit, these points will definitely help you in relaxing and going through this process calmly. The points to remember are:

• Take it Impersonally: The rule of thumb to survive small business audit is to avoid turning it into an “us vs. them” situation. Quit thinking that the IRS will take you down. It won’t. In fact, they are straightforward and friendly in terms of their duty. So, do not give them the vibe that you are trying to hide something or deceiving them. Even if there are mistakes, they are not going to harass you in rectifying those. According to Forbes, out of 2 million business returns filed every year, only 1.6% is audited. Thus, the chance of you being harassed is almost zero.
• Keep Things Simple and Straight: The IRS is usually forthcoming about their expectations from you during the audit process. You have to understand those expectations and therefore it is easy for you to give them what they want and consider your account closed. For instance, they might want proof of your donation to charity through mail. Simply get a photocopy done and submit it to them. Consider your audit complete. Even in the case of field audit, clear instructions are provided regarding the proofs. As long as you are not deceiving them intentionally, you can relax. So, do not make it more complicated and you will be surprised at how easy and smooth the process is.
• Make the Upcoming Audit Smooth: Now that you know what it consists of; make the next one simple as opined by your bookkeeper. Try to maintain income statements, financial records and tax records for 3 years. Additionally, retain your check book stubs for the same period of time. Keep a tab on the tax deductibles as well to avoid making any kind of mistakes in the record.

Professional audit for small business is not a very big issue until you make it that way. Keep it simple and straightforward for the IRS so that you can be safe. Keep clear records and also provide proofs for all the transaction and maintain clear books with the help of Isle of Man bookkeepers to avoid mistakes and thus any kind of penalty.

Virtual Bookkeeping Steadily Gaining Popularity Among Small & Startup Businesses

The concept of Virtual Bookkeeping has garnered popularity in recent times. This approach of bookkeeping is allows an accountant or a bookkeeper to provide accounting services to a client from a remote location. The range of accounting services proves to be equally beneficial for both the service providers as well as their clients. In contrast to the conventional approach, this modern strategy provides greater flexibility and proves to be cost-effective as well. A virtual bookkeeper usually takes help of professional versions of bookkeeping software to post financial transactions as well as review and update statements and reconcile accounts.

Nowadays bookkeeping services for small and medium business enterprises in the UK and other parts are a much needed requirement. The service providers usually work from a remote location and with the use of cloud based accounting software like Xero, simplifies the overall accounting and bookkeeping process of the business. In order to facilitate a smooth working condition, businesses or clients require granting the bookkeeper remote access to the server where all financial documents are stored. With the help of accounting software, creating financial accounting reports, invoicing, tracking inventory to paying bills and managing payroll of employees, everything is done with ease. The virtual accountants also do not take up office space and do not require the resources that other office employees are entitled to. They work flexibly and of course do not require working on fixed-hourly basis.

A Xero bookkeeper, who provide remote and virtual service to their clients prove helpful for small and startup businesses. The category of businesses usually finds it hard to employ full-time accountants but simultaneously, requires the accounting service. The range of bookkeeping services is renowned to provide accounting solutions from remote locations that is comprehensive, full-proof and dependable on all aspects. The fraternity of virtual accountants has a reputation for completing their task right within specified deadlines too.

Inside Small Business Bookkeeping in UK

We know of thousands of such small business owners or entrepreneurs who are great with creating products, launching them and also win over customers instantly. However, not all of them are equally good in basic bookkeeping. Moreover, if you are someone like me who learned it after much effort, this post is going to help you to jot down the points that are covered in small business bookkeeping in UK.

What All are There in Bookkeeping?

Apparently, it is not rocket science. However, it has a science of its own. Though most of the work today is done with the help of software, yet the basic accounts must be known to be able to function properly. Here is a list on the most important accounts that a small business entrepreneur should know:

1. Cash: This is the basic of basics. Cash Receipts and Cash Disbursements are the 2 basic cash accounts that are maintained by a Xero bookkeeper. It is one of the most important accounts in business accounting.
2. Inventory: This is the stock of the company and enables the owner to keep track of the products. The number maintained in the computer by the software must be tallied with the physical stock within the company.
3. Accounts Receivable: This type of account is created when your company does not get paid immediately for products or services sold. It keeps track of the amount due from customers. This helps in sending accurate bills to customers.
4. Accounts Payable: This is exactly the opposite because it keeps track of the money payable by the organization. Good bookkeeping ensures that the company makes accurate payment. Also, it prevents extra payment of money.
5. Sales: Sales is vital to any organization and keeping track of this will clarify the revenue generated by the company. The position of the small business can be measured with the help of this account.
6. Purchases: Making purchase is an important part of running any business. Keeping track of purchased raw materials and finished goods help in knowing the company’s gross profit.
7. Loans Payable: Whatever money is due on the part of the company in lieu of buying vehicles, equipments, furniture or such objects is maintained in this account.
8. Payroll Expenses: This is the biggest monetary account and the most important one because it contains all the tax and government expense records.
9. Owner’s Equity: This keep a record of how much each owner has contributed towards business. This account can be divided into Capital and Drawing Accounts for small businesses.
10. Retained Earnings: This deals in reinvesting profits into the business and not sharing it with owners. This account is cumulative and hence provides a good overview for lenders and investors to know about the company’s performance over a long period of time.

All these accounts constitute bookkeeping. To think each of these were maintained manually even during the last decade. However, now, there is software to help maintain these accounts which are absolutely important for small businesses.

Know-How on Tax Deductibles for Small Business Houses

Attentive bookkeeping is essential for any business and particularly for small businesses who often suffer from financial losses due to unorganized financial data. Tax deductions and exemptions are also calculated depending on the ledger documents maintained by bookkeepers. To keep these deductions and exemptions transparent you can seek professional help from professional online bookkeepers offering bookkeeping services for small businesses in the UK. United Kingdom is dotted with several small business entrepreneurs who are in dire need of such professional aid.

Some tax tips for small time business entrepreneurs include:

• Deductions for Home Offices: Many small time entrepreneurs work from home and are afraid of claiming their legit deductions. This fear stems from audit sessions but can be overcome by keeping track of all transaction records.


• Purchase of Technological Equipment: Buying computers, printers and even vehicles come under tax deduction. The cost can be split or one can pay the money altogether depending on the item. Even business related software comes under tax deduction. Also make sure that you use the single vehicle for your business purpose.


• Travel Expenses: Going around for business purpose entails various types of expenses. Some of these are airfare, hotel fees, car rental and laundry costs as well. Food is also deductible up to 50%. Moreover, if you are travelling with your family, only your cost of travel comes under tax deduction. Taking clients out for a meal is also 50% deductible. Conference fees and visits to amusement parks also come under deductions.

Keeping all these things in mind might be difficult and confusing for a business entrepreneur. However, a Xero certified bookkeeper will easily and accurately maintain the record and therefore be ready for deductions. Such software as Xero helps in sorting out difficult and lengthy tasks and reduces it into easy and accurate ones. In fact, they make for easy access of ledger and financial data.