Thousands of years ago when commodities were exchanged for other goods and services, the Egyptians, Romans and Greeks all recorded their trades on pieces of parchment. It’s fair to say the process has changed dramatically since then with a modern bookkeeper dealing with an increased number of transactions, improved digital software, and much less parchment.
The importance of good bookkeeping practices
Nowadays, not only is maintaining accurate financial records required by law, but keeping track stands you in good stead to know all you can about your business income and expenditure. Creating viable budgets and having a focus on building strong business strategies allows you to make better informed decisions, whereas bad bookkeeping practices often play a critical role in the failure of a fledgling business.
Technological advancements
The theory of bookkeeping hasn’t changed since an abacus was used instead of a computer, but the advancement of technology has enabled professionals to add new services and gain new skills. Gone are the days of counting machines and cash book ledgers, now is the age of software.
Today, transactions are increasingly digital, and therefore need more thorough tracking than they did even just 20 years ago. Computer programs, when coupled with a bookkeeper with the right knowledge and experience, can make time-consuming and complex tasks more attainable.
Specialist bookkeeping
While this technology means the process itself can be quicker, when correctly set-up, the modern world and the growth of the internet have meant the complexity and volume of data requires specialisations on behalf of the bookkeeper. These can occur in a number of ways; they can be based upon certain programs like Sage or Xero, or can be in relation to specific business processes such as payroll, or auto-enrolment.
Making Tax Digital
Perhaps the biggest advancement in the last five years is Making Tax Digital, which was first announced in 2015. The aim is to improve the efficiency of the current system for business owners and individuals, and the first stage of the Government’s plan to modernise the UK’s tax system came into effect in April 2019. It requires companies with a taxable turnover above the VAT registration threshold to keep and send VAT returns via Making Tax Digital approved software. This allows HMRC to receive information electronically and subsequently improve the time it takes to process submissions whilst reducing the risk of errors and misrepresentation of VAT liabilities. You can find out more about Making Tax Digital here.
Here at AMR we have evolved with the advancements and have a team of friendly and approachable professionals able to assist with all bookkeeping and payroll services. Get in touch and find out how our specialisations can help you and your business.
