Introduction

Introduction

This course is split into modules and designed to allow you to progress at your own pace. Where possible I have tried to make it less academic nature and more interactive where you can actually enter transactions and do bookkeeping exercises throughout the module. Some modules are more theory based due to their content.

Why Bookkeeping

Whether you run your own business and need to learn how to complete the books for the business or you want to become a bookkeeper this is a useful skill to learn.

We are offering the course FREE so everyone can access it, so please enjoy the course.

I am assuming you have no prior business knowledge so to ensure we all start with a level playing field I’m going to go through some basic principles then build on them as we go through the course, so please don’t think I am being patronising if you know some of what I’m about to tell you, you will learn more as we progress.

Business principles

People trade in various forms of legal entity for their business Sole Trader, Partnership, Limited Company and Limited Liability Partnership.

All businesses have one common goal the making of profit. In order to be profitable businesses, need to ensure a few objectives are met and as bookkeepers we can help clients achieve this:

Control expenditure (this is not necessarily just reducing costs) by that I mean business owners need to evaluate continuously what they are paying for services and products and ensure they get value for money. Your role in this with clients would be to identify where costs are disproportionately increasing in a particular area (i.e. electricity bills this year are 50% more than last year) most small business owners wouldn’t even notice this. That might surprise you but from my experience business owners work in their businesses not on their businesses, this means for example if they are a plumber they are out working fitting bathrooms etc. and earning money to pay bills they don’t notice a lot of the time that these bills creep upwards. At the end of the year they say to you I’ve been busy but I don’t seem to have earned anything. If you were proactive you may have pointed these rises in costs out to them so they can either shop around for alternatives or if necessary increased their prices. This will keep them ahead of their competitors and help them stay in business and you have provided a worthwhile role.

Increase sales. I always say to clients to work smart, not hard. I don’t mean don’t do hard work or long hours (we all have done in order to start and grow our businesses) but if they are not careful they can become busy fools, a lot of small business people are. Don’t fall into the trap of thinking more sales=more profit. Whilst it is sometimes the case that more sales=more profit quite often you see sales going up and expenses going up faster which means less profit. During the growth phase of a business this might be essential as you need infrastructure in place to grow (i.e. premises, staff, equipment) and without these you cannot grow it should only be for a short while. Again indicators to look out for to notify your client

3. Evaluate the need for spending. New businesses, in particular, want every new gadget and accessory they can, after all, the business is paying and its tax deductible is what their view is. Spending does not necessarily increase business performance. For example as a bookkeeper you need a computer while you don’t want one 15 years old and slow as this will be counterproductive as it will take too long to do work you don’t need the newest state of the art machine costing £2000+ it won’t earn you more money by being that fast, you can’t work fast enough to keep up with it. I tend to buy computers for £300-£500 as they are fast enough for the work I do bookkeeping programs do not need a fancy graphics cards, state of the art processors and masses of memory. Things however like smartphones so you can have email while you’re away from the office are ideal so clients are not left waiting for responses for too long.

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