Accounting question

So this may sound like a stupid question but, why do small businesses need bookkeepers to tell them and sort out their expenses and income for them, when they can just look at their bank statements? Like what is the need to upload bank statements on Xero and sage50 software and create income statements, balance sheet etc when everything they spend is literally on their bank statements. Plz help me understand this.

Reply 1

FriedFish

14

Because bank statements are sheets of paper with everything there at once, so it’s always useful to be more organised and categorise items. Bookkeepers can also calculate taxes for the business (including VAT in from purchases and out from sales) and wages for employees (including their income tax and NI on top of that.) It gets complicated rather quickly even for a small business. It’s just saves time for the business owner and knowing you have someone competent behind your accounts. Accountants are also useful on the management side of things to give financial advice.

Reply 2

Zarek

21

Personal finances are confusing enough with just bank statements. Even a small business needs to properly track what is going on to pay the correct tax and to control performance

Reply 3

natninja

21

Original post by Yyy1

So this may sound like a stupid question but, why do small businesses need bookkeepers to tell them and sort out their expenses and income for them, when they can just look at their bank statements? Like what is the need to upload bank statements on Xero and sage50 software and create income statements, balance sheet etc when everything they spend is literally on their bank statements. Plz help me understand this.

Filling statutory accounts (if incorporated) and tax returns for one. Also tracking invoices, payables etc. what's in the bank isn't everything.

Accounting question

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