Bookkeeping 'vital to small business success'

It is vitally important that small business owners keep up with their bookkeeping in times of economic uncertainty, an industry expert has said.

Writing in The Journal, Stuart Lynn, head of research and development at the small business department of Sage, explained that it becomes even more important for small businesses to correctly manage their finances when times are tight.

He explained that as well as doing things like carrying out credit checks on potential customers and keeping on top of invoices, small business owners needed to make sure their bookkeeping was up to date.

Mr Lynn said bosses should always "keep a record of all payments, bank statements and bills" and added: "Bookkeeping may be mundane, but it is essential to keep track of the cash that is coming in and out of the business.

"You may find it easier to computerise your accounts; there is a variety of software packages available to help you to do this."

As an alternative, Mr Lynn said that many sole traders opted to employ accountants to manage their books.

Recently, accountants reported that many small businesses were trying to control their cashflows in the face of an economic slowdown by attempting to spread out their VAT liabilities.