The Importance of Good Quality Accounting Records

Why is it so important is it to keep good quality accounting records.

This is the second in a series of articles discussing five ways in which you can help your accountant to provide you with the service you deserve.

In the first article we talked about getting records to your accountant in good time. In this post we are going to cover the importance of making sure those records are as accurate and tidy as possible.

Preparing a set of accounts from good quality and accurate records, is a very different task from preparing them from a carrier bag full of receipts!

Ideally, we want to get a set of accurate accounts prepared in a reasonable time, which then gives us the time to carry out a review of the final figures. This is a very important part of the process. Amongst other things, we will be considering whether the business is performing as expected, if there are any specific areas of concern which need to be looked at, and whether the client could be operating in a more tax efficient manner.

However, when the source records we are working from are in disarray, the focus of our attention is on just trying to get a set of reasonable looking figures together as best we can. This is very time consuming, and eats into the time we could spend reviewing the final figures. It also means that we are less confident in the accuracy of the final figures, making the review more difficult.

It is therefore very important to keep good quality accounting records to give your accountant a solid base to prepare the accounts from.

This opens up the question of whether you should use proper accounting software, spreadsheets, or even the old fashioned method of pen and paper. The answer to this depends on the size of your business and how competent you are using accounts software.

For all but the very smallest of businesses, I would recommend using at least a spreadsheet to keep track of your business transactions.

Even better is proper accounting software, and there are some very good and relatively easy to use cloud software packages available. Used properly they can be a real asset to your business.
However, the key words here are ‘used properly’. I would much rather have good quality spreadsheets or even manual records, than an accounts software package which hasn’t been used properly and is in a mess.

In saying that, for larger businesses, accounts software is an essential. So if you haven’t got the time or inclination to use it yourself, then it’s worth considering outsourcing the work to a bookkeeper.