7 Tips To Improve Your Bookkeeping
21 January 2022
Captains are running a complex business : A luxury boutique hotel or villa, a beach club, a private dining room all with an operating budget of millions of euros and the added complication of safety management, security, and employment rules in an often challenging environment. Ideally to manage an operation of this complexity you need financial records to be reliable and accurate.
Regular and accurate bookkeeping is the key to understanding the financial status for your operations and moving to a position where you can base decisions on future operations based on real-time data.
A Captain I spoke with recently changed their accounting software last year and commented that while the system was good the work on data entry and review was still required by the Captain/Purser. If you work on the basis that your accounts need to be updated at year-end to meet your statutory requirements then you are introducing unnecessary risks into your business or yacht operation.
The Small Medium Enterprise (SME) has seen a revolution over the past decades with a new breed of accountants adopting digitalisation to deliver in-depth advisory services to their client base.
Digitalisation can help business owners by providing them real-time data on the performance of their businesses. These businesses now have access to financial information and an advisor.
Breaking the Mould Accounting assists with designing and implementing financial processes to reduce duplication in the preparation of information, remove the extra costs of paying, and remove reliance on spreadsheets for reporting.
7 Tips To Improve Your Bookkeeping:
- Use a data extraction tool. There are many available that integrate with accounting systems. Dext Prepare (Receipt Bank) and Hubdoc are widely used by modern accounting businesses.
- Use an expense management tool with a prepaid card with an API feed to your accounting system.
- Set rules to process regular transactions such as recurring subscriptions.
- Use an accounting system that can facilitate automatic bank feeds or; if uploading bank transactions schedule this regularly.
- Fund payment transactions in the correct currency.
- Bank reconciliations are completed weekly.
- Engage a professional bookkeeper or accountant to maintain your accounting records. The investment in a professional will ensure it is done correctly. The risks arising from incorrect record-keeping for Regulatory and Tax and the cost of remediating incorrect bookkeeping make this a wise choice.
A simple step to reduce the cost in your yacht owning structure is to maintain one accounting system for management information, budgeting, and meeting your compliance obligations e.g. annual accounts, company tax, VAT, and Exchange of Tax Information.
In the event of a Tax or VAT investigation, the first point of call for a Tax investigator will be to request the accounting records of the owning company so these records need to contain sufficient detail to meet legislative requirements. You then have one source of truth for the operations, planning, and budgeting. Too often yacht managers and Corporate Service Providers will both maintain accounting records, leading to duplication of work and cost to the owner.
Over 50% of Corporate Service Providers admit that they have not started the digitalisation of their administration processes and are still operating on Enterprise solutions that make it difficult to share real-time data with clients. Often Corporate Service Providers will have administrative systems that allow them to report for their own regulatory reporting, and the management information for the Captain or family office is secondary. Often reports are prepared using tools such as Excel which are prone to errors and not easily maintained.
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