bouncycastlesuk

Balancing the Books – The Less Exciting Element of Bouncy Castle Business Ownership

Posted on: February 21, 2011

Whilst owning and running a bouncy castle business is certainly an enjoyable and sociable form of work, just like any business it is a vital component of success to keep records of all the transactions made. Hopefully this brief introduction to basic bookkeeping will help to put you in the right mindset of keeping your finances monitored.

There are two major reasons why it is important to keep effective records:

For Yourself

The first and most important reason to keep your books is because unless you know exactly what money is going in and what finances are going out, how can you understand how well the business is doing? Essentially you need to know the money you have made, the money that is owed to you and that you owe to comprehend how healthy the company is financially.

For the Law

There are numerous legal reasons why it is essential to keep financial records. Ultimately you need to show the tax man full records for auditing purposes, you are also required legally to keep bills and receipts as these form your tax return and finally you need to know precisely what your annual turnover is as if this is over a certain amount you will have to register for VAT purposes. Unfortunately failure to do the above can result in fines and more serious penalties.

How to do this

Effective bookkeeping is about being organised, therefore making sure that cash is divided into various areas is advisable. Money should be split into money in and money out files, each filled with uniquely referenced paperwork such as bills, receipts and other invoicing.

In your money in file you should have a record of all the money you were paid over the year. Within the ledger it is worth recording the date when the money came in, how much money the payment was for, who the payment was from and also the unique reference number assigned to the invoice.

The same applies for the money out file and section of your ledger dedicated to expenditure. A column should contain the date, who you were paying, how much it was for and also the reference number of supplier’s paperwork or your own assigned unique reference for the receipt. Understandably you must also monitor the petty cash for smaller business orientated purchases. For the sake of clarity it can also be worth referencing the reason for the purchase e.g. was the payment for a new bouncy castle, a replacement blower or even some new ground stakes?

By keeping this information in an orderly and conscientious manner you have the best chance of understanding how successful your business is but also make the process of completing your tax returns much easier.  This has only been a brief guide as to how to start thinking about your books in a logical way, it has hopefully has made the process a little less daunting.

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