Bookkeeping

Organisations maintain a process of recording the financial transactions including purchases, sales and all forms of expenditure and income. This process originated from keeping accounts in physical books and is referred to as Bookkeeping. With the development of computer technology and contribution of software, database and remote data storage facilities in saving time and other convenience, most organisations choose digitalisation of financial records. Whether you maintain your financial records in hard copies or electronically, there are standard systems for how they are organised and presented.

As you grow and develop your business, you can rely on DD Chartered Accountant to do daily bookkeeping, ensuring that you are constantly up to date with exactly what your money is doing. Learn more about business transactions, the banking system and double entry bookkeeping. Learn More.

There are two systems in practice – single-entry bookkeeping and double-entry bookkeeping.

This system maintains a chronological record of receipts and payments. Due to its simple design, single-entry bookkeeping is well suited to sole traders and other small businesses that find double-entry bookkeeping too time-consuming and complex for the additional information it provides.

This system distributes financial transactions and assets of a business among numerous accounts. Every transaction is recorded in two accounts i.e. double-entry – for every transaction recorded, a credit to one account is matched with a debit of the same amount to another. The balancing of credit and debit across two accounts for every transaction allows for controls to be conducted to identify errors. This system offers a basis for detailed and precise aggregated management information and controls.

In the United Kingdom, organisations with an annual turnover of £85,000 or more are obliged to register for VAT. Refer to HM Revenue and Customs (HMRC) for VAT Return. If your organisation is registered under VAT, you must maintain bookkeeping, clearly showing the VAT component of all payments made and received. VAT must be charged not only on your sales within the UK, but also on all export sales within the EU. Sales to non-EU countries are exempt from VAT.