Integrating your online bank and credit card accounts with accounting software like Xero can save you a lot of time. With a few clicks or taps you can match sales and bills with your bank transactions. So, why does your bookkeeper also need copies of your bank and credit card statements?
In practice, duplications and deletions can appear in your bank feed. If we don’t identify and correct these problems, they can take a long time to resolve later. Most importantly, this is how we keep your accounts accurate, HMRC-compliant, and straightforward.
How mistakes happen. To create accurate year-end accounts, we rely on your bank statements. While accounting software is a valuable tool, human mistakes and technical hiccups can lead to errors. You may be surprised how easy it is to miss duplicates when you’re checking figures online. Of course, if an entry is missing, you’re very unlikely to notice. That’s why it’s important to verify all the information against your bank and credit card statements.
Chasing paper. To claim all your allowable expenses, you need receipts. You can scan them using an app like Dext to transfer the details straight to Xero. However, the information must still link to your bank and credit card statements. Most importantly receipts don’t help you manage your cashflow or show when transactions appear in your account.
HMRC compliance. HMRC requires evidence of your business income and expenditure. Estimates aren’t evidence. Bank statements, however, do prove that your transactions are real and verifiable. If you have paid non-allowable expenses from your business account, your bookkeeper can make sure they don’t appear in your tax returns.
Saving time. When we have all your statements available, we can quickly and efficiently review your finances and reconcile your accounts. We won’t have to repeatedly contact you for additional information. You can relax, knowing your accounts will be complete and filed on time. This helps to create a fast, efficient and stress-free process, and you’ll avoid penalties for late or incomplete submissions. It saves you time and money too.
Frequently asked questions
Do bookkeepers really need my bank statements?
Yes. They provide a verifiable source of information for each business transaction. Without them, there’s no guarantee your accounts are accurate.
Why can’t I use my accounting software balance for my year-end accounts?
Accounting software can include duplicated transactions and may not have all the relevant information. Bank and credit card statements confirm what really happened.
What happens if I don’t provide my bank and credit card statements?
Missing bank and credit card statements can delay your year-end accounts. This could lead to interest payments and penalties from HMRC. More importantly, if HMRC finds inaccuracies or has concerns you could face a tax inspection.
Does my bookkeeper also need my personal bank statements?
No. However, you should put all your business spending through your business account. Mixing personal and business finances complicates the accounting process.
How far back do you need statements?
For your year-end accounts we need statements covering your accounting year and we may also need opening or closing balances. For tax purposes you should keep your financial records for at least seven years.
Please get in touch if you would like to know more or for help to simplify your bookkeeping processes.
Share this post: