Question 1

How much does bookkeeping cost for a small business in the UK?

Accepted Answer

Bookkeeping costs for UK small businesses typically range from £100 to £500+ per month, depending on transaction volume, complexity, and service frequency.

At Strix Accountancy, our bookkeeping fees are based on factors like your business size, number of monthly transactions (typically 50-200 transactions), and whether you need weekly, monthly, or quarterly updates. Sole traders with simple finances may pay from £100 per month, whilst limited companies with payroll, VAT returns, and higher transaction volumes typically invest £200-£500 monthly.

We offer transparent fixed-fee pricing through our instant quote calculator, ensuring no hidden costs. Professional bookkeeping typically saves businesses more than it costs by preventing costly errors, maximising tax-deductible expenses, ensuring HMRC compliance, and freeing up your time to focus on revenue-generating activities.

Many clients find our service pays for itself through improved cash flow management and tax efficiency alone.

Question 2

What's the difference between bookkeeping and accounting?

Accepted Answer

Bookkeeping and accounting are complementary but distinct services.

Bookkeeping is the day-to-day recording of financial transactions—logging sales, expenses, invoices, receipts, and bank reconciliations using software like Xero or QuickBooks. It’s the systematic process of maintaining accurate, up-to-date financial records.

Accounting uses those bookkeeping records to prepare year-end accounts, file tax returns, provide strategic tax planning, analyse financial performance, and offer business advice. Accountants interpret your financial data to help you make informed decisions, whilst bookkeepers ensure the underlying data is accurate and complete.

Think of bookkeeping as the foundation and accounting as the analysis built upon it.
At Strix Accountancy, we provide both services: our bookkeepers maintain your daily records with cloud accounting software, whilst our ICAEW Chartered Accountants use that data to optimise your tax position, prepare statutory accounts, and provide strategic financial guidance.

Most UK businesses need both services working together for complete financial management and HMRC compliance.

Question 3

Do I need a bookkeeper if I use accounting software like Xero or QuickBooks?

Accepted Answer

Yes, even with excellent accounting software like Xero or QuickBooks, most businesses benefit significantly from professional bookkeeping services.

Whilst these cloud platforms automate bank feeds and basic categorisation, they still require human expertise to ensure accuracy, properly categorise complex transactions, reconcile discrepancies, handle VAT correctly, manage intercompany transactions, and maintain HMRC compliance.

Common issues include incorrectly coded transactions, unreconciled items, missing receipts, VAT errors, and duplicated entries—problems that software alone cannot identify or fix.

A professional bookkeeper ensures your software is set up correctly, transactions are accurately categorised according to HMRC rules, bank accounts reconcile properly, and your financial data is reliable for decision-making and tax filing.

We often rescue clients who’ve struggled with DIY software bookkeeping, finding thousands of pounds in errors, unclaimed expenses, and compliance issues. With our bookkeeping service, you get the efficiency of cloud software plus expert oversight, ensuring your books are always accurate, up-to-date, and audit-ready.

We can also train you to use the software effectively for your own financial visibility whilst we handle the technical compliance aspects.

Question 4

How often should bookkeeping be done for my business?

Accepted Answer

Bookkeeping frequency depends on your transaction volume, business complexity, and reporting needs.

For optimal financial control, most UK businesses should update their books at least monthly, with weekly or daily updates recommended for businesses with high transaction volumes or tight cash flow.

Monthly bookkeeping suits most small businesses, ensuring VAT returns are accurate, payroll is processed correctly, and management accounts are available for decision-making.
Weekly updates benefit retail, hospitality, or e-commerce businesses with daily sales and rapid inventory turnover.

Daily bookkeeping is essential for businesses needing real-time cash flow visibility or those in growth phases requiring immediate financial insights.

Leaving bookkeeping for quarters or year-end creates several problems: you lose visibility of your financial position, making cash flow management difficult; errors accumulate and become harder to identify; HMRC deadlines become rushed and stressful; and tax planning opportunities are missed.

Under Making Tax Digital (MTD), VAT-registered businesses must maintain digital records and submit quarterly VAT returns, effectively requiring at least quarterly bookkeeping.

At Strix Accountancy, we typically recommend monthly bookkeeping for most clients, with weekly or fortnightly updates for higher-volume businesses. Cloud accounting software allows us to update your books remotely on your chosen schedule, providing real-time financial dashboards whenever you need them.

Question 5

Can I do my own bookkeeping or should I outsource it?

Accepted Answer

Whilst DIY bookkeeping is technically possible using software like Xero or QuickBooks, most business owners find outsourcing more cost-effective and less risky.
Consider DIY bookkeeping only if you:

Are a sole trader with very few transactions (under 20 monthly)
Have accounting knowledge
Enjoy detailed record-keeping
Have time to learn software and HMRC compliance rules

However, professional bookkeeping becomes essential as your business grows, especially when you register for VAT, employ staff, operate as a limited company, or exceed 50 monthly transactions.

Common costly mistakes in DIY bookkeeping include:

Miscategorised expenses (reducing legitimate tax deductions)
VAT errors triggering HMRC penalties
Missed bank reconciliations hiding theft or errors
Incomplete records failing HMRC audits
Time wastage on tasks outside your expertise

Outsourcing bookkeeping typically costs £100-£300 monthly but saves business owners 10-20 hours per month—time better spent on revenue-generating activities.

Professional bookkeepers also ensure HMRC compliance, maximise tax-deductible expenses, provide accurate financial reports, spot irregularities quickly, and give you confidence in your numbers.

At Strix Accountancy, our bookkeeping service includes cloud accounting software setup, monthly reconciliations, expense categorisation, VAT returns, and direct access to experienced bookkeepers. Most clients find the service pays for itself through time saved and errors prevented.

Question 6

What is Making Tax Digital and how does it affect my bookkeeping?

Accepted Answer

Making Tax Digital (MTD) is HMRC's initiative requiring businesses to keep digital records and submit tax returns using MTD-compatible software. Currently, MTD for VAT is mandatory for all VAT-registered businesses, regardless of turnover. From April 2026, MTD for Income Tax Self Assessment (ITSA) becomes mandatory for sole traders and landlords with annual business or property income above £50,000 (reduced from the previous £30,000 threshold). This means you must use approved accounting software like Xero, QuickBooks, or Sage to maintain digital business records, keep all transactions recorded digitally (no paper-only records), submit quarterly updates to HMRC showing your income and expenses, and file your final tax return digitally through the software. Paper records and manual spreadsheets are no longer acceptable for MTD-registered businesses. Non-compliance results in penalties starting at £200 for the first failure, increasing for repeated violations. The practical impact on bookkeeping is significant: you need MTD-compatible software with proper configuration, regular bookkeeping updates (at least quarterly for ITSA, monthly recommended), digital receipt storage through apps or cloud systems, and professional support to ensure correct categorisation and compliance. At Strix Accountancy, we specialise in MTD-compliant bookkeeping using Xero software, ensuring your digital records meet HMRC requirements. We handle software setup, train you on digital record-keeping, manage quarterly MTD submissions, and ensure you're fully compliant with current and upcoming MTD regulations, avoiding penalties whilst maintaining accurate financial records.

Question 7

What records do I need to keep for HMRC and for how long?

Accepted Answer

HMRC requires UK businesses to retain all financial records for at least 5 years from the 31st January tax submission deadline (6 years for limited companies from the end of the financial year).

Required records include:

All sales invoices and receipts showing business income
Purchase invoices and receipts for business expenses
Bank statements and credit card statements
Payroll records including RTI submissions and P60s/P45s
VAT returns and supporting documentation
Asset purchase records for capital allowances claims
Mileage logs if claiming vehicle expenses
Details of any grants, loans, or investments received

Records must be kept in a format that allows HMRC to check your tax calculations during an investigation—either digital (preferred) or paper. With Making Tax Digital, most businesses must now maintain digital records using approved software
.
Missing or incomplete records during an HMRC enquiry can result in:

Estimated tax assessments (usually higher than actual liability)
Penalties for inadequate record-keeping starting at £3,000
Denial of expense claims without supporting evidence

Cloud accounting software like Xero automatically stores digital records with receipt attachments, transaction histories, and audit trails, making HMRC compliance straightforward.
At Strix Accountancy, our bookkeeping service ensures all your records are properly categorised, stored digitally with supporting documentation, and retained for the required period. We maintain complete audit trails and can quickly provide HMRC with any requested information, protecting you from compliance issues and ensuring all legitimate expenses are properly documented and claimable.

Question 8

How do I catch up if my bookkeeping is behind?

Accepted Answer

If your bookkeeping is behind, immediate action prevents mounting problems and potential HMRC penalties.
Step 1: Gather all financial documents

Bank statements
Invoices and receipts
Payment records
Previous bookkeeping files if available

Step 2: Organise documents chronologically by month to make catch-up easier.
Step 3: Assess how far behind you are

A few months requires different action than multiple years of backlog

For small backlogs (1-3 months): You may catch up yourself using accounting software and dedicating focused time, though professional help ensures accuracy.

For significant backlogs (6+ months or multiple years): Professional catch-up bookkeeping is essential.
At Strix Accountancy, we specialise in catch-up bookkeeping services, typically completing 6-12 months of backlog within 2-4 weeks depending on complexity and document availability.

Our catch-up process involves:

Reviewing your current position and deadlines
Reconstructing transactions from bank statements and available documents
Reconciling accounts to identify discrepancies
Categorising expenses correctly for maximum tax deductions
Establishing ongoing bookkeeping processes to prevent future backlogs

Costs for catch-up work depend on how far behind you are and record quality, but investment typically saves money through better tax planning and avoided penalties.
Being behind also affects your ability to make informed business decisions, secure financing, or complete year-end accounts on time. The sooner you address bookkeeping backlogs, the easier and less expensive the resolution.
If you’re facing deadlines for VAT returns, year-end accounts, or tax submissions, let us know immediately—we offer expedited catch-up services to meet urgent HMRC deadlines.

Question 9

What cloud accounting software do you recommend and why?

Accepted Answer

We primarily recommend and use Xero for most UK small businesses, though QuickBooks and Sage are also excellent depending on specific needs.

Why we prefer Xero:

Cloud-based (accessible anywhere, anytime, on any device)
MTD-compliant for VAT and incoming ITSA requirements
Unlimited users at no extra cost (great for working with your accountant and bookkeeper)
Excellent bank feed integrations with most UK banks
Real-time financial dashboards and reporting
User-friendly interface requiring minimal training
Integrates seamlessly with hundreds of business apps for invoicing, payroll, expenses, and inventory

For UK businesses, cloud accounting software is now essential rather than optional, particularly with Making Tax Digital requirements.

Cloud software benefits:

Your bookkeeper and accountant can access your records remotely
Automatic backups (no data loss risk)
Real-time collaboration on financial matters
MTD-compliant automatically

Other options:

QuickBooks is another strong option, particularly popular in the US but fully UK-compliant, with excellent inventory management features
Sage remains popular with larger businesses and those requiring specific industry modules

When choosing software, consider:

Your business size and complexity
Whether you need payroll or inventory management
Your comfort level with technology
Integration requirements with other business systems

At Strix Accountancy, we’re Xero certified partners and include Xero software setup and training with our bookkeeping packages. We configure your Xero account correctly from the start, set up bank feeds and automated rules, train you on basic functions for your own financial visibility, and provide ongoing support.

Many clients find Xero transforms their financial management, providing real-time insights previously unavailable with spreadsheets or desktop software.

Question 10

Can bookkeepers handle my VAT returns and payroll?

Accepted Answer

Yes, professional bookkeepers can handle VAT returns and payroll as part of comprehensive bookkeeping services, though this depends on their qualifications and your service agreement. VAT return preparation is a natural extension of bookkeeping since it requires accurate recording of all sales and purchases with correct VAT treatment. A qualified bookkeeper categorises transactions by VAT rate (standard 20%, reduced 5%, zero-rated, exempt), reconciles VAT control accounts to ensure accuracy, prepares VAT return figures from your bookkeeping records, and submits returns digitally to HMRC under Making Tax Digital requirements. However, complex VAT issues—like partial exemption, international transactions, or HMRC disputes—typically require accountant involvement. Payroll processing includes calculating employee wages, tax, and National Insurance, processing PAYE and National Insurance payments to HMRC, submitting Real-Time Information (RTI) returns after each payroll, producing payslips for employees, managing pension auto-enrolment contributions, and preparing year-end P60s and P11Ds. Payroll requires specific qualifications and software, so ensure your bookkeeper is properly qualified and insured for payroll services. At Strix Accountancy, our bookkeeping service includes VAT return preparation and submission for most clients (as long as your VAT affairs are straightforward), with our accountants reviewing complex situations. We also offer integrated payroll services, managing everything from pension auto-enrolment to P11D benefit reporting. This integrated approach ensures your bookkeeping, VAT, and payroll work together seamlessly, with one team handling all aspects of your financial compliance. Bundling these services is typically more cost-effective than using separate providers and ensures consistency across all your financial records, reducing errors and simplifying your life.

Bookkeeping Services

Timely & Reliable Bookkeeping for Your Business

Serving UK Businesses | ICAEW Chartered | Your Trusted Bookkeeping Partner

What is Bookkeeping & Why Does It Matter?

Our Bookkeeping Services – What’s Included?

Daily & Weekly Bookkeeping

Bank Reconciliation

VAT Returns

Income & Expense Tracking

Financial Reporting

Cash Flow Management

The Benefits of Outsourcing Bookkeeping to Strix Accountancy

Precision. Clarity. Confidence.

FAQs – Bookkeeping Services