The Ultimate Guide To Staying On Top of Your Finance Books

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Pearl Lemon Accountants
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Quickly Scale Accounting With Our Services on Bookkeeping for Limited Companies

There are more than 4 million limited companies in the UK. These companies reduce personal financial risk. If you are a sole trader, you are individually liable for any indebtedness. Your accounting must be organised if you own a limited company or plan to start one.

Fortunately, Pearl Lemon Accountants can help you do just that. Our talented, skilled bookkeepers will help you stay on top of your business records and save time and money by reducing errors and maintaining correct financial statements. 

Book a call and speak with one of our chartered accountants today.

What Is Bookkeeping?

Bookkeeping is essentially recording any financial transaction related to your organisation. This can include sales, payments, purchases, and receipts from your organisation or the individuals within it.

A bookkeeper oversees cashbooks and documents, ensuring all transactions are aggregated and recorded within and beyond the financial year. An accountant can then use these records to generate reports and accurate statements.

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How Bookkeeping Should Work In A Limited Company

Limited companies are subject to stricter rules than sole proprietorships or partnerships. This could make bookkeeping for small businesses more difficult. 

Whether you want to keep your books yourself or hire a professional bookkeeper, these rules will help you understand how it should be done;

You Are Not Your Own Limited Company

A limited company exists independently of its shareholders and the company director. Even though you own the company, everything it does is done in its name. This means that all transactions within a limited corporation belong to the company rather than the owners.

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Director's Loan Account

Company inflows are typically modest or non-existent. Sometimes, you may need to cover company bills using your own cash. You are already aware that your limited company has its legal existence, so if you pay for any company expenses, you are loaning money to the corporation. This becomes the corporation’s obligation and will be settled at some point.

An entirely different scenario could occur, and you could borrow money from your limited corporation. In this instance, you will be required to repay the funds. You will record these transactions while doing bookkeeping under an account named director’s loan to keep track of these occurrences.

Expert Tips On Bookkeeping For A Limited Company

A Limited Company is a separate business entity registered as a legal person with Companies House. This means that the firm owns all financial assets first. If you own a private limited company or plan to start one, your accounting must be organised and up to date.

Here are some smart tips to help you stay on your books;

Separate Your Personal And Business Expenses

Using a company account as a personal account might lead to a corporation tax return issue. Therefore, it is preferable to keep both accounts distinct. Also, keeping your bank account separate from your business account might protect your assets in case of a legal lawsuit.

No one wants to think about the possibility of having to dissolve the company or becoming embroiled in legal issues. If this occurs, it is critical that your hard-earned personal assets, such as cash deposits, retirement funds, and personal property, are secure to recover quickly.

When deciding the type of corporate entity to form, remember that some provide more protection than others. Always consult a CPA or an attorney to determine your case’s best choice.

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Tax-Saving Tips

If your turnover has exceeded £85,000 in the last 12 months (2019/20 tax year), you must register for VAT. HMRC has recently cracked down on enterprises that have neglected to do so, and you could face a fine.

Consider participating in the Flat Rate VAT Scheme. 

This not only simplifies your VAT accounting, but you may also pay less tax depending on how much VAT you charge and reclaim. During the first year, you get an extra 1% off the flat rate you must pay to HMRC.

Remember only to declare dividends when the company has enough accumulated profits. Any payouts that have been ruled illegal will face penalties.

Don't Throw Anything Away

Depending on your business structure, you must maintain all paperwork, including invoices and receipts, for at least seven years. Some accountants recommend keeping company records for longer in case of a future examination. As a general rule, seven years is enough time to defend against tax audits, litigation, and potential claims.

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Use Accounting Software

To prevent future financial problems, you must find a competent provider to keep track of your income and expenses conveniently. You could begin with Microsoft Excel or a free service, but as your needs evolve, you will require premium software with fewer limitations. Your accountant can make a recommendation.

Pearl Lemon Accountants works with various market-leading online software platforms, and we will help you choose the best option for your business.

Outsource Your Bookkeeping

As your company expands, you may find yourself devoting more and more time to bookkeeping. In this case, hiring a professional bookkeeper is vital. Outsourcing an expert will enhance productivity, and you can more confidently be free to focus on operating your business. This will also provide superior long-term value allowing you to earn more revenue for the business.

A competent bookkeeper from Pearl Lemon Accountants will keep your company’s books on track and provide accurate financial information required for statements, ledger audits and more.

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Signs You Need To Outsource Your Bookkeeping

Here are a few indicators that can help you understand why and when your company would require an outsourced bookkeeping service;

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You Suffer From Backlogs

If your company is successful, you will frequently be busy with clients and other administrative operations. The first financial year is critical for growth, sustaining, and expanding your client base.

In such instances, enterprises frequently procrastinate on attending to books, resulting in a significant backlog. We advise outsourcing an expert as backlogs might take weeks to clear.

It Becomes A Barrier To Business Growth

Whether a large or small business owner, your business will face numerous external and internal challenges. External factors include rivals, government policies, and changes in preferences. Internal factors include severe workload, failure to fulfil deadlines, and poor job quality in many cases. However, every business concept is designed to overcome these obstacles and support the business toward success.

Nobody expects old books to burden their business, yet they can do so. If you agree and are in such a circumstance, outsourcing can save your business and possibly help you multiply your revenues and flourish.

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High Dependence On Your Employees

Being overly reliant on a few key employees won’t do well for your business. Do you have a backup plan in place if your bookkeeper or accountant decides to leave? What about when they’re unwell or away on vacation? Your bookkeeping and accounting tasks will continue to pile up, reducing your total productivity, and your best will suffer.

Instead, build a team of professionals working on your limited company accounts, and outsourcing would be the best option. This ensures that personnel issues are handled internally without interfering with your daily operations.

Benefits Of Hiring Pearl Lemon Accountants

Outsourcing a bookkeeper can be challenging. Hiring an accounting service has helped several companies. Here are some benefits you get when working with us.

Enhance Your Cash Flow Management

Bookkeeping helps you to solve urgent operational concerns related to your organisation. 

  • Can you hire new people? 
  • Can you afford to buy new equipment? 
  • Can you open a new store? 

By providing financial data to your accounting department, our bookkeeping services can provide significant insights into cash flow and other records. Without improved bookkeeping solutions, your accounting team would lack up-to-date information to make big-picture decisions affecting your company’s future.

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Avoid Stress During Tax Season and Audits

Do you get anxiety-driven panic attacks around tax season? 

Don’t worry! Our bookkeepers will assist you in better preparing for tax season and audits. 

We see small business owners and entrepreneurs running all the time to find what they need for their CPA. It becomes a never-ending back-and-forth with their accountant, and they will likely lose key tax deductions due to a lack of accounting records. 

Our accountancy service can ensure that everything is meticulously managed and documented, allowing you to breeze through tax season without breaking a sweat.

Save on Accounting Services

Most firms see outsourcing as an additional, and thus needless, cost to their operations. This is not true. Our accounting outsourcing clients are eager to lower costs while maintaining or improving quality.

Furthermore, outsourcing with us will help you save money on salaries, taxes, office supplies, and benefits for full-time or part-time employees. 

You only pay for what you need. 

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We'll Be Your Advisor

Nobody expects outdated books to become a burden to their business, but they can significantly affect you in the long run. Hence, always staying on top of your books becomes crucial.

Here at Pearl Lemon Accountants, we understand how small business owners like you tend to lag behind their financial statements. We can quickly correct this. We constantly offer suggestions on improving accounting efficiency, sustainability, and productivity.

Whether it’s taxation, online accounting software, or even financial advice, let us do the hard work to eliminate your accounting burdens- get in touch with us.


Bookkeeping should be done regularly, monthly, and quarterly.

Limited liability partnership firms must retain double-entry bookkeeping records. This essentially means that all transactions are logged with their corresponding entries.

Digitalising tax is a new tax system implemented by HMRC that compels firms to have online bookkeeping records. The new laws will be implemented gradually, but getting a head start on maintaining your data digitally won’t harm you.

A highly experienced bookkeeping partner has knowledgeable employees about modern accounting and bookkeeping technologies. Aside from that, here are some qualities you need to consider when outsourcing a bookkeeper:

  • Experience 
  • Skill and Competence
  • Reliability 

With Pearl Lemon Accountants, you don’t need to worry about hiring an incompetent and sloppy one. We ensure that our experts have all the qualities you’re looking for. Hence, making them an excellent asset for your company.

When you allow us to keep track of your finances, you give yourself more time to do your work and please more clients. It's a win-win situation for everyone. Aside from that, you'll also gain financial stability because your assets and liabilities are managed well enough not to cause any trouble for you in the future.

So let our experts work for you, and you won't regret it even a bit.

Book a call today to get started.