Bookkeeping is when you keep records of the daily financial transactions of your business, helping make sure that your tax calculations and payments are correct.
It is a very important part of the accounting process for your business, or those who are self-employed, as it helps ensure your information is correct and up-to-date, helping you avoid legal issues and penalties.
Why is bookkeeping needed?
The process of bookkeeping should be done regularly, making it easier to analyse your business’ monthly statistics and see areas of strength and weakness. It will also mean your business is much more likely to pay the correct amount of tax, as well as complying with all tax obligations and relevant VAT, saving your company a number of problems.
Bookkeeping can be done in more than one way, with single-entry bookkeeping and double-entry bookkeeping being just two examples.