This blog recently examined where the responsibility for a business’s bookkeeping actually lay, and whether you do your own bookkeeping or contract it out, you should be aware of what qualities actually make a bookkeeper a good one.

Here, in no particular order of importance, are what I believe to be the qualities possessed by all good bookkeepers:

• Organisational skills

Given the nature of the work, you would want your bookkeeper to have superb organisations skills. They should be able to manage their time and workload in a manner whereby they are responsive to all their clients’ needs and are able to retrieve information and accounts very quickly as and when required.

• Conscientiousness

A quality that’s welcome in all employees or contractors. You would want your bookkeeper to feel invested in the work that you give them and expect to process, working to the best of their ability to meet your business’s bookkeeping needs.

Obviously, this is all subject to what particular service level agreement you have put in place with your bookkeeper (you can’t expect someone to carry out services you are not paying them for) but you are in the right to expect a certain level of proactivity from them on your behalf. Anyone who is looking to work very strictly within the parameters of your contract with them is not necessarily going to go the extra mile for you when you really need them to.

• An understanding of your business

A good bookkeeper would spend time to get to know your business, in terms of what products and services it offers, and the type of customers or clients you deal with. Not only will it give them a better understanding of your invoicing needs (if they’re going to be doing the invoicing on your behalf) but it will give them a knowledge that may help solve accounting anomalies as and when they arise.

• An exceptional memory

While you can’t expect a bookkeeper to have immediate total recall, it is a great advantage to employ one with an exceptional memory and an attention to detail. If you have to address a historical accounting matter, having a bookkeeper on your side who can remember all the surrounding circumstances of a particular payment or invoice can be incredibly handy.

• Familiarity with new technology

Good bookkeeping is not inherently reliant on being able to use modern technology (in theory, a pencil and a ledger book could suffice). However, the modern world is reliant on modern technology and there are many legitimate accounting programs (such as Prelude Accounts) that can save your bookkeeper time and can improve the associated processes within your business.

If a bookkeeper is charging you according to their time, you should query with them what processes they are using; you could needlessly be paying over the odds. Also, modern technology can consolidate processes (invoicing and updating your books, for example) as well as provide the reassurance of automatic backups. A bookkeeper should be moving with the times and be using the technology and processes that you want them to use.

• Professional, polite demeanour

Many people use their bookkeepers to chase up late payments or to contact suppliers, and it is therefore important that they can be personable on the ‘phone or via written correspondence, projecting a professional demeanour that reflects well on your business’s brand.

• A basic understanding of accountancy and new developments in the sector

A bookkeeper cannot offer all the services an accountant or accountancy firm can, but there is an overlap between the two. A good bookkeeper would have half an eye on developments within the accountancy sector, and should be able to adapt their processes accordingly as well as flag with you issues that may require the attention of a professional accountant.

• Qualifications

While basic bookkeeping does not require a bookkeeper to have previous experience or qualifications, you are best off with someone with a tangible track record of bookkeeping elsewhere or someone who has sought suitable qualifications, especially from a respected body such as the IAB (the International Association of Bookkeepers).

As already mentioned, technology plays an important part in the modern office, so not only is it desirable for a bookkeeper to be familiar with accounting software (and preferably more than one type), they should also be able to use (with great proficiency) spreadsheet programs such as Excel and possibly CRM (Customer Relationship Management) systems so they can dovetail their work into your business’s other processes.

 

The above is very much an idealised wish list of qualities I would expect from a bookkeeper (you’re unlikely to get someone with all these qualities, especially at the lower end of the market) but it is important to have high expectations from someone in such a role, and to have those expectations to a greater, rather than a lesser, degree.

In most business processes, a crucial and sensitive issue is pinpointing the responsibility for specific duties or functions onto one clearly defined individual within (or without) an organisation. In layman’s terms, “where does the buck stop” when things are going or have gone wrong?

Bookkeeping and accountancy are no different from any other business process, although new technologies and shared functions have unfortunately blurred the issue in the minds of some.

Legally speaking, in the UK, the answer is quite clear. If you are a Director of a Limited Company, you are responsible for the company’s accounts. If you are a Sole Trader, you too have an equal responsibility to record and account for your financial affairs for Self Assessment and Income Tax purposes.

However, many Directors and Sole Traders make the wrong assumption that the moment they hire a bookkeeper or an accountant, they have somehow absolved themselves of these responsibilities. Why is this?

This is partially down to a misunderstanding or a miscommunication about what actual service level agreement has been put in place between a businessperson and their accountant or bookkeeper. Because the businessperson is paying a fee for accountancy or bookkeeping services, they assume that such services are all encompassing when they may not be.

Who is to blame for such misunderstandings? Obviously the circumstances change from accountant to accountant, bookkeeper to bookkeeper, and client to client. However, there are some tips which might prevent confusions and problems down the line:

•          An accountant or bookkeeper should talk through the businessperson’s financial obligations from the outset of their relationship with a client.

While this may be covered in detail in any associated contract, it is important that the client is fully appraised as to what is expected from them and that the accountant or bookkeeper in question is confident that the client has understood this.

•          The client should be explicit about what aspects of accountancy and bookkeeping they expect an accountant or bookkeeper would do on their behalf.

Both disciplines have many different facets and have different scales (depending on the size of the enterprise in question), and therefore the costs and coverage of an accountant’s services would change accordingly.

Don’t assume that your accountant or bookkeeper will do everything for you as it is likely that they won’t, and if you need high level support for your business’s financial affairs, explain exactly what you need so that they can explain to you where you can get such services if they themselves do not offer them.

•          Both accountant/bookkeeper and client should establish when and to what depth their accounts are going to be reviewed.

Just because an accountant and a client may be in constant contact does not necessarily mean that the books or accounts are also constantly under review.
If a client needs periodic reviews of their accounts, they should stipulate this when they employ the bookkeeper or the accountant. If an accountant, quite reasonably, cannot offer weekly or monthly supervision of their books, they too should be upfront on what they arenot prepared to do, while suggesting solutions or alternative approaches for their clients.

It is this last point which is the most interesting of all, because new technology such as Prelude Accounts allows for a greater degree of information sharing between accountant and client than ever before. With online accounting software, a client and accountant can input and review information in real-time and from any location, something that would have been unimaginable 20 years ago.

With a greater connectivity comes the risk of greater assumptions. Just because someone is able to manage their own bookkeeping in real-time does not mean that they are actually doing so.  Similarly, just because an accountant is able to review their clients’ accounts on a daily or weekly basis, does not mean that they are actually doing so, even if it can be done as simply as with the click of a button.

Technology can enable all sorts of collaboration between interested parties, sharing of information and processes, both manually and automatically, but it is wrong to make assumptions about any of these.  Instead it would be wise to ensure an explicit understanding between the two or more human beings involved as to who is doing what and by when and, specifically in the case of accountants and their clients, that this is embodied in a contract (for example, a Service Level Agreement).  It would also be wise to review these arrangements periodically to ensure that they continue to meet the clients’ requirements and to ensure that they are still being carried out as they were specified.

All of this is not to suggest that you should forsake technology such as Prelude Accounts; far from it.  What I hope it does show is that technology tools can help improve accountancy processes as long as the people who use them know how to use them properly and the parties involved know what their contractual involvements, commitments and responsibilities are.

As I stated clearly at the top of this article, it is always the business owner who is ultimately responsible for the bookkeeping of their business, but this does not mean that they cannot get high-level support in order to meet their responsibilities. However, the business owner must understand the extent of their responsibilities and of their competences in order to determine the nature and extent of the support that is actually needed.  Having done this they should then ensure that the support taken is documented by a contract that clearly identifies the parties’ contractual obligations.

(by Ian Vickers, Friday 1st August 2014) 0 comments Bookkeeping and accountancy are no different from any other business process, although new technologies and shared functions have unfortunately blurred the issue in the minds of some.

For many people, accountancy andbookkeeping is just a chore and a cost that they would like to keep to a minimum. The less you have to do the better, and there have been huge advances in how accounting software can help the accountant and client, as our own Prelude Accounts is testament to.  But just how far can one go in automating accounts and accountancy practices, from a technical viewpoint?  Also is it really desirable, from a corporate governance and managerial perspective?

One new feature being promoted by many accounting software providers is ‘Automatic Bank Reconciliation’.  In layman’s terms, this is promoted as a new function that can speed up the accounting process by marrying up your bank statement or bank account with the records held on your accounts package. The inherent promise of this is that you are removing the time consuming process (and therefore the associated cost to your business) of having to manually input your bank account transactions into your accounts package or spreadsheet.

It sounds very desirable, doesn’t it?  After all, who really wants to pay a bookkeeper or an accountant to do this if some software can do it all for you?  However, I personally believe this to be problematic for a couple of serious reasons, not least because I don’t think true automatic bank reconciliation is actually possible.

Maybe I am splitting hairs here but for me ‘automatic’ or automation implies that a manual human action is no longer required beyond starting the process in question.  In other words, an automated process would involve pressing a button that triggers a whole series of functions to be carried out without my intervention or supervision until I am notified about or presented with the final result or product of that process.  For me, automatic bank reconciliation does not meet that description.

From the materials I have read about accounts packages that offer “automatic bank reconciliation”, reading beyond the headline I find that the function actually requires a lot more of the user that just pushing a solitary button on your screen.  First of all, there is no technical way for your accounts package to automatically synchronise with your bank account given the levels of online security that most bank accounts have applied to them, and rightly so.  Think of all the passwords that have to be inputted as well as the manual key fobs with the ever changing code that have to be activated and inputted every single time you log into your bank account.  Even if this behaviour can be replicated in an accounts package, would you actually want it to?  What would that tell you about the online security of your business bank accounts?

So having dismissed the ‘magic wand’ definition of automatic bank reconciliation as an impractical and undesirable myth, what does this function actually entail?  As far as I can discern, it involves a three stage process with each of those stages involving human input; a user must download their account statement from their online bank account as a CSV file, which they then must upload to their accounts package. The accounts package will then attempt to marry up the incomings and outgoings of your bank account with your own invoices and those of your suppliers as recorded on your accounting software package. The user must then ‘sign off’ this report, having first checked for and corrected any mismatching errors that may have arisen due to the accounting software confusing one transaction for another with the same amount and/or date for example.

So far, this does not sound like a great labour or time saving application. Given the comparative ease most modern accounting software packages offer for the manual input of or confirmation of data in your books, surely it would be just as simple to quickly do this yourself accurately the first time than have to edit an automated report that may be riddled with confusion and inaccuracies?

To my mind, given that many organisations have standardised pricing for either their products or services, I struggle to see how an algorithm can accurately marry up multiple entries of income for the same amount on the same day with multiple invoices. How would it know that payment X is from customer Y for invoice Z, if you charge the majority of your customers the same amount for the same services or products?

I would argue that this process would be further complicated by the fact that many organisations may pay you from bank accounts that do not clearly identify the company that was invoiced or with a reference that doesn’t clearly identify the invoice being paid. For example, if you have invoiced a company called Acme that happens to be a subsidiary of a larger company called An Example Company, and An Example Company actually makes the payment into your bank account, how would an automatic bank reconciliation process know that An Example Company is doing so on Acme’s behalf for that specific invoice?  Of course, it might be possible to instruct your software to make the connection between the two, but that would require further proactive effort by the user, and that means we are moving yet further away from anything approaching automation or a time-saving function.

Consider also your supplier invoices and other outgoings.  Do you always enter these in your accounting software and write cheques and make online payments in the same consistent manner that an automated bank reconciliation process can reliably identify?

The same questions arise whether the software is attempting to predict payments and receipts from your entered customer and supplier invoices if you haven’t entered the payments and receipts, or is attempting to match the bank’s records with your entered customer receipts and supplier payments if you have entered them.  The problem is compounded if you have entered some but not all invoices, payments and receipts.  Also what about credit notes and refunds?

But let’s dismiss for a moment all the technical questions and concerns I have raised above along with my querying of what ‘automatic’ actually means in this context; even if automatic bank reconciliation was possible and deliverable as implied by some marketing literature, is it really desirable?  Would it ultimately help the management processes, efficiencies and governance of an organisation or company?  I remain sceptical.

For one thing, technical error is not unlikely and is equally as problematic as human error.  A good bookkeeper or an accountant is just as competent and capable as good accounting software, and it is the marriage of the two that gives companies and individuals the assurance that their affairs are clearly in order.

Also, unlike software, a human user has intuition and experience that can be applied to a scenario.  If accounts get muddled, or if mispostings have occurred, a human user can more readily deduce what has happened than software can. The accounting software will have no insight into the real world dynamics or misunderstandings that lie behind accounting errors and it will not be able to reconcile or explain what may have happened.  Isn’t it better to do this at the point of inputting information into your accounting software rather than untangling what has been interpreted through automatic bank reconciliation? I would argue so.

Finally, there is a danger of automating everything as it takes away the insight and supervision required for the financial health of a company or an organisation. By having vital steps hidden out of sight or carried out automatically, you are removing opportunities for employees or owners to flag inaccuracies or concerns about possible errors, misuse of funds or forthcoming financial difficulties that a company may be facing.  As much as such things may be seen as chores or burdens, I would argue they are vital actions that keep businesses sharp, functional and compliant.

You won’t be surprised that I am against the idea of automating bank reconciliation in principle and I urge you to be sceptical of claims made of the benefits it can bring.  In practice I think many exceptions to the rule would have to be managed so as to cancel out any time-saving benefits that may have been gained.

Notwithstanding this, of course automation is always something to be sought to achieve with software for processes and tasks that can and should be automated.  We have received much good feedback from many accountants and their clients and in the coming months we will be introducing new and useful automation features to Prelude Accounts.

You have made the decision. You want to change the accounting software for your business as your current package is no longer meeting your needs. But how do you go about it and what do you need to bear in mind?

In this article we will explain 8 top tips that can help you.

1. Be clear as to why you want to change and what you need from a new accounting package

It is likely that you are dissatisfied with your current software, whether this is with the software itself or with the support provided by the vendor. It is important to identify why you want to change. You don’t want to leap from the frying pan into the fire, so ensure that your new package will do what you need it to do and that everyone who needs to use it can do so.

Write a list of your requirements that any new software must satisfy. As well as features and functionality, this should include the level of support you require from the software vendor, a clear release update policy and maybe integration with other software that you use. Ensure that this list covers any dissatisfaction you have with your current software.

Prioritise the items in the list into ‘must have’ and ‘nice to have’, which will help you to identify a shortlist of potential packages and in negotiations with your chosen vendor.

2. Inform your accountant of your decision to change

You’re probably not the only one who will have to use the new software, so consult with your accountant as to which package you want to go for. They too will need to be comfortable with using the software, or at least exporting the necessary information from it.

Some accountants may be biased in favour of one package over another, especially if they are encouraged by software vendors to promote their products, but remain clear as to what you want and why you want it.

3. Research the market and determine a shortlist of candidates

You now know what you want; all you need to do it is get it! Make sure you fully assess the options available and make use of any free trials that may be available so you have the best idea of what you will eventually end up with.

Also try and future proof your purchase, and look out for new useful features such as Cloud computing and storage.

4. Audit your current IT infrastructure to confirm that it will support the new software

Software is only one part of the equation; your hardware is the other. If you don’t have the right computer hardware on which to run your preferred accounting software, you will have to either scale down your expectations of what software you can actually use or take the plunge and update your hardware.

Don’t get too fooled by the notion that the more high end and expensive software is necessarily better. There are many great online accounting packages that can be used through a secure internet connection and a simple browser, negating the need to buy a powerful PC or an over-elaborate accounting system that is designed for much bigger organisations than your own.

5. Check whether you can export all the data that you need from your current package

It is important to know how much of your data can be exported from your current software and if it is in an intelligible format that can be easily imported into your intended new software. You can investigate this yourself or maybe ask the current software provider.

If this can’t be done, it is probably a good thing that you have decided to change your accounting software. The bad news though is that you will have to manually input some or all of your historic accounting data into your new software package.

6. Plan how you intend to migrate your data to the new software

For an existing business the key issue in migrating accounting data is to ensure that the ‘opening’ balances on the new software are consistent with the ‘closing’ balances on the old software. This consistency can be achieved either by a complete migration of all data to the new software or by a ‘transition’ period whereby results from old and new software are combined.

This task can often be a time-consuming exercise to plan and execute and some software vendors will downplay this to potential customers to encourage them to choose their product. So seek cast-iron assurances from your software vendor that all vital accounts data can be migrated across and in an intelligible format.

You could choose to do this yourself, but it might be better to ask the new software vendor or an accountant or bookkeeper to do it for you. This could mean additional cost but you would have recourse to the supplier if the task were to take longer that expected or require remedial work.

7. Consider keeping your old software going as you install and break in your new software

If at all possible, keep your old accounting software going and in use for a short while as you start using the new software. It will give you reassurance that your accounting andbookkeeping processes are being maintained if you encounter issues running or using the new software.

If you are planning to run the two systems in parallel, make allowances for the time and cost of the increased user time needed to keep both systems up-to-date as well as for any additional training required for the new system.

8. Check everything is working and everyone who needs to sue the new software can do so

Review the implementation and the use of the new accounting software after one month. Is it doing everything that you expected it to? Can everyone that needs to access it do so easily? Is your accountant happy with it? If the answer is ‘no’ to any these questions, it might just be a case of adjusting permissions or preferences rather than the new software being at fault.

Investigate the concerns fully and, if the problems are insoluble and unacceptable, raise your issues directly with the software vendor and think about switching again to a different software package (although if you have followed the preceding 7 tips, you are unlikely to be in this position).

(by Ian Vickers)

It would be easy to say that there is no need for you to change your accounting software if you feel that it satisfactorily manages your business accounts. You had a need, you bought a solution, and that solution is fulfilling that need. However, it would be complacent to think that your accounts are being managed as efficiently or as effectively as they could be without further consideration.

Technically speaking, you could satisfactorily manage your accounts with a pencil, pad and an abacus, so maybe there is always time for you to review your existing setup and assess whether you need to change your accounting software.

This blog has previously examined the qualities of what makes for good accounting software, and I would recommend reading that article alongside this one. I believe that there are six questions that you should ask yourself when assessing whether you need to change your accounting software.

1. How much time do you spend managing your accounts yourself?

Do you spend an excessive amount of time managing your accounts through your existing software? Do you find that your current accounting processes involve a lot of duplication and are generally fiddly? If the answer is ‘yes’ to either of these questions, it is likely that your software is not meeting your needs or that you haven’t been sufficiently trained to use it properly.

Good software enables us to carry out activities more quickly and more effectively than by any other method. In 2014, it simply is not acceptable to persevere with a software package that isincreasing your workload rather than reducing it.

2. How much do you pay for your accounting software per year?

If you have paid a few hundred pounds for an accounting package and are also paying expensive yearly retainers in the form of a support contract, chances are that you are paying too much for a function that can be fulfilled far more cheaply by other software solutions.

While large, expensive accounting packages do have their place with large businesses, you do not necessarily need the same package, or indeed pay for it, if your business is a smaller concern.

Many of the more established brands of accounting software originated in an age when local computers, rather than the internet, were the main drivers of accounting packages and this is still often reflected in their costs. You could also be paying for features that you will never use in your business.

3. How portable is your accounting software? Can you use and access it easily from more than one machine?

Following on from the last point, can you securely access your accounts from more than one location or device? Traditionally, accounting software was stored on one computer or on one local server network, with access limited to one terminal or one building.

In this modern age of advanced telecommunications and the internet, such an approach is arguably as archaic as the aforementioned abacus. Contemporary, good accounting software should be accessible from any location and from different devices as long as there is internet access.

4. How easy is it for you to share your accounts with your accountant and other relevant bodies using the software?

Can your accountant easily access your accounts using their software packages? There would be little point in you maintaining your books on a system that is difficult for your accountant to access. Your accountant will probably also have to charge you more for the additional work involved.

Again, online accounting systems are a guaranteed solution to this issue, but if you are using more traditional forms of software, it would be wise to seek a solution that can be interpreted and accessed easily by the other people that need to. The more universal the package the better, for you never know when you may want to change your accountant and you don’t want to be totally beholden to their choice of software package.

5. Do you believe that your existing software is ‘future proofed’? And will it easily adapt to new computer hardware and software as they emerge and are adopted by you?

You have been using your existing accounting software for years and you are reliant on it, but how confident are you that it can easily be installed on any new computer that you buy or that it will work with the latest version of your computer’s operating system?

Software will only remain current and adaptable as long as its developers are willing to maintain it to keep pace with new technological contexts, whether that be hardware devices or the basic software that make those devices work.

Software vendors might cease to support products because the businesses themselves have ceased trading or because they have made a conscious decision to stop supporting a particular product because it is no longer in their commercial interests to do so. In other words, they want or need you to buy or upgrade to a new or replacement product.

Don’t find yourself trapped in using old accounting software that you may eventually have difficulty in supporting or retrieving information from. An even worse scenario is if you are reluctant to upgrade other elements of your IT infrastructure in fear of losing the ability to access your existing accounting software!

It is true that all things eventually come to an end, but you must try and choose an accounting software package that looks flexible and durable enough to weather changing IT and business contexts.

6. How much money and time would you lose in the short-term and how much money would you save in the long term by changing your accounting software?

This final question will form the crux of the decision, a cost-benefit question that only you can answer. By answering the previous five questions, you should be able to calculate how much your accounts package is currently costing you in time and in other unforeseen ways and you should include that cost in ongoing business forecasts if you decide to stick with that package.

You may decide that the likely ongoing costs are acceptable for your business, especially if you are looking to recoup money that you may have already spent on your existing software package. However, the evolution of technology tends to make things cheaper (rather than more expensive) in the longer run, and while it may have been the norm to pay hundreds of pounds for accounting software in the past, it probably need not be necessary to do so today.

I hope this article has provided some context in which you can evaluate your existing accounting software needs. If you would like to discuss these issues further with someone, please contact us.

Your accounts are the heart monitor of your business; if there is no heartbeat (or no profit being made), the patient (or the business) could suffer and die. They represent the financial health of your business and you will use them to judge your business performance and to help you make key decisions like whether to invest in a marketing project or to buy new stock or new plant and machinery.

This is the first essential reason for why it is so vitally important to keep accurate and verifiable accounts. Without them, how will you know how well your business is performing and whether all your efforts in running the business are worthwhile? From good accounts alone you will know how much your business has spent, how much money it has coming in, and from that how much profit or loss it is making. These are the bedrock performance indicators of any business; the others, whether it be the number of contacts in your database or the number of hits to your website, are ultimately meaningless without any understanding of how much money your business is making or losing.

Also, other people and businesses will want to view your accounts to assess the value and strength of your business. This might be your bank considering an application you have made for an overdraft or commercial loan. It might be someone you have invited to invest in or buy your business. Or you might apply for a grant from the government or local council. All of these will require comfort and confidence in your business which your accounts can help provide.

Finally, and simply, maintaining the accounts of a business is a legal necessity. HMRC requires you to maintain detailed records of all your business transactions in order to calculate your income tax or corporation tax liabilities and to pay them when they become due. Similarly, if your business is VAT registered, you must monitor your VAT liabilities and pay them when they become due. HMRC requires you to maintain further detailed records of all your transactions that are subject to VAT.

Without your accounts, your business will effectively cease to function and you could find yourself in legal trouble. It is therefore a business imperative to get your accounts right and be mindful of the consequences if you get them wrong. Keeping good accounts will not guarantee that your business will succeed, but if you don’t keep good accounts and thereby lose control of your business finances, your business will almost certainly fail.

There are several ways to ensure that your accounts are and remain accurate. As this blog has previously explored, an accountant can be extremely beneficial in maintaining and optimising your business, while some basic organisational discipline can take the stress out of doing your accounts. Good accounting software can also help you manage your books, with many accounting software solutions being hosted online via ‘cloud computing’, which means that you can update your accounts wherever you have an internet connection. There is simply no longer the excuse for not maintaining your books.

Yet it is equally easy to get your accounts wrong. Sometimes the very tools that are there to help us can trip us up along the way.

Jonathan Scott of J N Scott Designs was one such person who could have got into trouble even though he was trying to do the right thing. Jonathan started his business in 2012 and to manage his books he opted for a well-known accounting software package, which he found overwhelming and confusing.

The accounting software package was too complicated for Jonathan’s needs which resulted in it not being configured correctly for his business, with the consequence that he had inadvertently been adding VAT to his invoices and his accounts when his business was not VAT registered. Luckily, Jonathan consulted with an accountant who spotted this error, resolved the problem and switched him to an online accounts package that was far easier to use.

If Jonathan hadn’t sought advice and had just relied on his existing accounts package alone, he could have found himself in trouble with HMRC for submitting accounts that showed VAT calculations when he was not registered for VAT. As Jonathan told me, “My previous accounts package was too complicated, offering me features that I didn’t need but yet not doing what I wanted it do; it was scary.”

Getting your accounts wrong will undermine your ability to run your business efficiently and successfully but it can also have consequences beyond this. It can land you in legal trouble, damage your professional reputation and leave you subject to financial penalties imposed by HMRC. As Jonathan’s story shows, you can get your accounts wrong even when you are trying to do the right thing. So, if in doubt, get the necessary professional advice and adopt the right bookkeeping system that suits both the needs of your business and your personal skills and preferences.