I know what you’re thinking…typical accountants going on about the boring stuff!  

Well, here are two facts that you may not be aware of…

  • Failing to maintain proper records is, in many cases, illegal and can lead to personal prosecution.
  • Failing to maintain proper records is recognised as one of the main causes of business failure in the UK.

 

Imagine taking your car on a long journey (again – see previous post!) without any dashboard information being available to you.  You don’t know what speed you’re doing, whether any faults are developing or when you are going to run out of fuel.  

You may think that you have enough driving experience to be able to gauge these things in your head but at some point, you are going to get it wrong and there is nothing to tell you otherwise. You are heading for trouble.

Running your business without good financial information is exactly the same. You may think that things are okay but you have no meaningful record of what you’ve actually done and, more importantly, what’s coming up.

“I don’t have the time” is the most common excuse we hear, followed by “I’m not an accountant, I don’t know how”.  In reality, they are saying “I don’t think that it’s important and I can’t be bothered to sort it out”. When you consider that the alternative is prosecution or business failure then any excuse seems pretty crazy.

It’s all well and good having an accounting system in place but if it’s not kept properly or up-to-date then you still can’t get hold of accurate information on your business as quickly as you need to.  

I come across businesses which have invested in an accounting system such as Sage, for example, but use it for little more than doing their VAT returns. A wasted investment and opportunity. If you don’t have up-to-date, accurate accounting records then:

  • You have no reliable information to assist you with your everyday business decisions;
  • You pay unnecessary fees to your accountant;
  • You cannot supply information to your bank, mortgage lender, etc., and therefore can’t get financial help when you need it.

 

In other words… You put your business at serious risk.  Don’t be one of those people!

Action points

  1. Make sure that your bookkeeping is up to date so that you can make good, informed financial decisions, and you are not falling foul of legislation.
  2. Review your numbers regularly

Not sure where to get started with getting up to do…there are 2 options.

  1. Give us a call and we can have a chat about how we can help
  2. Join my next Bookkeeping Bootcamp challenge which gets you all caught up in 5 days, and gets you a system you can stick to going forward

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