Bookkeeping shouldn’t be seen as an obligation, cause it’s the A to Z for any business’s survival and growth. Let’s examine what it is and why it’s so important for you.
What is Bookkeeping?
It’s the systematic recording of every euro that enters and leaves your business. We’re talking about:
- Income (your sales)
- Expenses (your costs)
- Payments (everything you pay)
- Invoices (those you issue and those you receive)
- Bank movements (everything that goes through your business account)
All this is recorded in physical or digital form so you have a complete picture.
Why Is It Essential?
Beyond being a legal requirement, proper bookkeeping offers you:
- Clear Financial Picture: You always know where your money is, what you owe, and what’s owed to you. This helps you make smart decisions.
- Tax Compliance: You avoid fines and issues with the government. Taxes are calculated correctly, with no surprises.
- Ease During Audits: You’re always ready for tax audits, without stress.
- Access to Funding: If you need a loan, a bank will require organized financial data.
Your Obligations in Cyprus
Cypriot law is clear:
- All companies and self-employed individuals must keep accounting records.
- These records must be kept for at least 6 years.
- Your accounts must be detailed enough to correctly calculate your tax liabilities (VAT, income tax, etc.).
- Companies must submit annual audited financial statements.
How to Do It Right (Best Practices)
For effective management:
- Record IMMEDIATELY: Don’t let invoices and receipts pile up. Record them as soon as they occur.
- Separate Personal & Business: Strictly use a separate bank account for your business. It’s the most important thing!
- Use Software: Invest in good accounting software. It will save you time and reduce errors.
- Archive & Back Up: Keep copies (physical or digital) of all documents. Back up your digital files (in the cloud or on an external drive).
- Check Regularly (Reconciliation): Perform monthly or quarterly checks to ensure your bank balances match your books and that your VAT is correct.
What to Avoid (Common Mistakes)
- Delaying income/expense recording.
- Lost or unorganized documents.
- Incorrect expense categorization.
- Failing to submit VAT or income tax returns on time.
YMC Consulting Is Here to Help
Don’t let bookkeeping overwhelm you. YMC Consulting offers comprehensive support for your business by setting up your accounting system, updating your books regularly and preparing your business for tax audits.
Secure your financial clarity today!
Contact YMC Consulting today at info@ymcconsultings.com
