When you are starting up a small business it can seem like you are spending more money than you are earning. During this period, we are obviously really keen to try to watch what we spend and tend to still do most tasks ourselves.
Unfortunately, by doing this we are doing a couple of counterproductive things.
The first is misdirecting our time into non-income producing tasks that will not contribute to the growth of our business.
Secondly, we may not be doing important tasks correctly which can lead to bigger problems and further expenses in the long run.
You Did Not Start Your Business to Do Paperwork
It is important to remember why you started in business and what you are good at. For example, you may be an amazing seamstress, an expert plumber or builder or a marketing guru, but when it comes to bookkeeping you may have little to no idea.
During our years of providing bookkeeping support to our clients we have seen this scenario play out so many times. While some bookkeeping tasks appear straight forward and newer accounting software is more intuitive to use, if the user really does not understand what they are doing the information recorded may not be useful.
We love working with new businesses to assist them in setting up their record keeping, bookkeeping and associated workflows at the beginning. This really provides value up front and can save a lot of pain and expense later by avoiding a big clean up.
Remember there is more to bookkeeping than just recording or entering daily transactions. You need to work with someone who is highly skilled, supportive, easy to communicate with and who will work with you in partnership to help you run your business
The upside of using a bookkeeper?
To explain this scenario better we have come up with a list to show what the benefits are of using a bookkeeper.
Cost effectiveness
You only want to pay for what you need. Outsourcing to a bookkeeper who is already qualified, registered and experienced will save you in the long run rather than employing someone directly. By not directly employing you will save on training costs, overheads like office space, computer equipment, keeping systems and software up to date, lost productivity, leave etc. Weighing up and comparing these costs is important.
Expertise
As highlighted above outsourcing to the right person will give you instant access to highly developed skills, qualifications, and a registered and compliant provider. Having access to this expertise will ensure greater accuracy and efficiency in undertaking your work. Having someone who is across the use of the relevant software will also lead to greater efficiencies as they are able to utilise any new features.
Time effectiveness
As the business owner your time is so incredibly valuable and should be used on core functions and not consumed with back end activities. These distract you from your main strategic goals. By working with a bookkeeper who is flexible and understands the goals of your business, you can plan work and meetings around your schedule, access relevant financial information when you need it and ensure your accountant is up to date so they can provide any required advice.
Accounts Receivable / Accounts Payable
Dealing with all the queries and tasks associated with managing your Accounts Receivable and Account Payable can take a considerable amount of time. Imagine the value of having a clear process for managing these in conjunction with your bookkeeper. Make the bookkeeper the main point of contact for your creditors and debtors. Your bookkeeper can regularly chase outstanding payments for you and help manage your client relationships as well as your cashflow. Your bills can be paid on time and suppliers kept informed. Keeping on top of this can not only help with relationships but can help you avoid additional costs like interest charges, late payment penalties etc.
Payroll
Do you employee staff? Does it make you nervous because it is complicated, and you want to make sure you are doing the right thing? Do you want to make sure your staff always get paid on time and are not left unhappy due to simple payroll mistakes? Payroll can be a minefield. Use your bookkeeper to ensure you are paying staff correctly, on time, issuing correct payslips, reporting and paying super, managing leave entitlements, reporting for payroll tax, and finalising Income Statements at the end of the financial year.
Reduced Tax Liabilities
Using your bookkeeper’s knowledge and experience you can feel comfortable you are correctly claiming all of your expenses. Your bookkeeper will work very closely with your accountant to identify any areas that need reviewing as well. Ensuring this is done correctly will assist your accountant with end of year returns. Having this done on time will also help reduce penalties and late lodgement fees.
Peace of mind
Imagine when you have sound bookkeeping processes in place. You can focus on running your business rather than getting caught in the administrative detail. The result of having processes up to date will lead to improvements in reporting, potentially improved cashflow, better managed accounts receivables and payables, and having all compliance deadlines met.
Do you have any feedback?
We are interested in any of your additional feedback about the benefits of using a bookkeeper. Did any of the above ring true to you? Are there any others you would like to share with us? We would love to discuss these benefits with you further.