Bank reconciliation is a common and reliable technique for verifying your bookkeeping quickly and efficiently. It is simply the process of comparing figures from your accounts against those shown on a bank statement. Ideally these figures should be identical. Any transactions found in the accounting records but not on the bank statement are said to be outstanding. If such a discrepancy has occurred you will be able to investigate further and identify any miscalculations or misunderstandings.

Bank reconciliation should be implemented into any effective bookkeeping system. It enables businesses and individuals to limit common accounting errors, including: cheques recorded as a lesser or higher amount than was presented to the bank; money received but not recorded or deposited at the bank; or even payments taken from the bank account without prior knowledge. Fraud is an ongoing risk for a company particularly as it grows in size and stature, thus vigilance in routine tasks such as bank reconciliation is an effective countermeasure and deterrent.

As previously stated this is a simple but often overlooked aspect of bookkeeping. After the cause of any discrepancy has been rooted out, and the correct adjustments have been made to the balance of the accounts, the two adjusted balances should agree. If they are the same, you have reconciled the bank statement, and saved yourself a considerable amount of undue stress and confusion by doing so.

Value Added Tax (VAT) is a tax that is applicable to most company transactions concerning the transfer or goods or services. Once your business turnover reaches £67,000 (as of June 09 – this figure is liable to change annually) you are legally required to pay VAT to HM Revenue & Customs. A business must pay VAT on its purchases and charge VAT on its sales. A VAT registered business receiving more tax from sales than it pays has to reimburse the difference to HM Revenue and Customs. If more VAT has been paid out than the company has charged for on its sales, the Revenue is required to refund the difference.

Certain types of goods and services are exempt from VAT. Insurance, loans, education and training often do not require VAT to be paid. If your business supplies only goods and services that are exempt, then you do not have to register, fill in VAT returns or make payments. However, you cannot claim the VAT back on your purchases.

Any company dealing with VAT would be wise to use Sage Line 50 to efficiently manage their incoming and outgoing VAT. A SkillsTrain distance-learning course would be an ideal choice for people of all levels to gain a thorough knowledge of bookkeeping and managing VAT.

Cashbooks are simple bookkeeping tools used to record relatively simple financial date concerning cash receipts and payments. They are the principal source of information for your transactions and comprise part of your financial ledger so are a vital tool for any efficient accounting system.

Cashbooks are increasingly transferring from the physical to software records, such as those found in Sage Line 50. It provides a straightforward way of staying on top of your basic account information. Detailed information and analysis of your financial data is analysed elsewhere, as a cashbook is designed specifically so that anyone can turn to it for information without expertise in Bookkeeping. Using Sage Line 50 you can print out a cashbook for people who need access to the information while keeping more specific information on the computer.

The design of the spreadsheets in a cashbook is a simple set of columns with titles. Generally a cashbook contains simple information such as the date of the transaction, the amount, source of the cash or the recipient of the cash out, and the current account balance. The Sage software allows you to provide more detailed financial information if you choose to.