Bookkeeping

Your financial records — accurate, organised, and ready when you need them.

Your bookkeeping is best done by a qualified bookkeeper who is licensed by their professional body. You can employ someone in-house or subcontract to an accounting firm like Watmore & Co. They should have bookkeeping qualifications — typically AAT (Association of Accounting Technicians) or ICB (Institute of Certified Bookkeepers) — and practical experience.

Can I do my own small business bookkeeping?

You can do some or all of your bookkeeping yourself, if you want to. However, much like DIY at home, we recommend only doing what you feel comfortable with! Mistakes in your bookkeeping can lead to misreporting to HMRC, which may result in fines and interest. Larger businesses often need a dedicated bookkeeper to keep everything running smoothly.

Bookkeeping is the recording of all your business transactions — your sales and spending. When you fall behind or make errors, you’re more likely to have cashflow issues, pay the wrong taxes, or struggle to make informed decisions.

Think of it like building a house: solid foundations are essential. Bookkeeping is the foundation of your financial reporting. Without accurate reports, your tax returns, budgets, and growth plans are based on guesswork.

How bookkeeping helps you stay organised

Bank transactions are sorted into income and expense categories, and you’ll need to keep receipts as evidence for HMRC. You can keep only digital copies, as long as they’re clear and can be read accurately. The categories you use depend on your business and what you want to track — you can go broad with “Advertising and Marketing” or get specific with “Social Media Ads.”

Bookkeeping matters all year round, but it becomes critical at specific moments:

• Applying for funding — lenders (including Access to Work) want to see reports like Profit & Loss and long-term forecasts, which rely on accurate bookkeeping
• Filing tax returns — your self-assessment, corporation tax, and VAT returns all depend on having the correct figures
• Making business decisions — understanding what you’re really spending helps you plan ahead

Accurate bookkeeping directly affects:

• How much funding you could get
• How much tax you pay
• How successful your business decisions are

The process involves:

• Importing your transactions — from bank feeds, apps, or records you provide
• Categorising your income and expenses — sorting each transaction into the correct category
• Matching up your receipts — attaching evidence to expenses (digital copies are acceptable)
• Reconciling your bank statements — making sure your records match your actual bank balance
• Creating journals — recording adjustments like prepayments, accruals, or account corrections

We use accounting software that’s Making Tax Digital (MTD) compliant, so your records are ready for quarterly submissions when required.

Research consistently shows that cashflow problems are one of the top reasons UK businesses fail — even when they’re profitable on paper. To manage cashflow properly, your bookkeeping needs to be up to date.

Good bookkeeping helps you:

• Track money owed to you
• Remember annual bills you might forget
• See how much you’re really spending on things like marketing
• Spot problems before they become serious

With the right categories, you can track anything that matters to your business.