A budget like no otherMarch 12, 2020
Working from homeApril 8, 2020
I attend a lot of networking events and one of the questions that I’m frequently asked is why people should use a bookkeeper. It’s a great question and I understand where people are coming from: there is a general misconception that bookkeepers simply enter data from invoices and receipts into a software package at an additional cost to the business. But I want to explain that bookkeepers are so much more than people who simply ‘do the books’. We can add a great deal of value too and become reliable members of your team.
A Bookkeeper’s Role
Bookkeepers can perform a wide range of functions for a business. There are many compliance tasks such as performing bank reconciliations, keeping records of invoices and receipts paying bills, chasing debtors and preparing vat returns. More qualified bookkeepers will also carry out the payroll for your business including, making sure you are compliant with new pensions rules, and preparing self-assessment tax returns?
As well as all that, they are expected to be knowledgeable about any current legislation which impacts accounting. This could be money laundering legislation (this has a penalty of imprisonment if you’re found to be laundering money or if you are complicit in the deception, whether you’re aware of this or not), laws around payroll or new rules surrounding the payment of tax. Bookkeepers use this knowledge and information to ensure that your accounts are in good shape and that you’re ‘playing by the rules’.
In addition to the operational and compliance roles that they perform, for some businesses, bookkeepers will take on an advisory role. This is where they will work alongside a business owner to help them understand their cash flow, identify trends and ultimately, assist them in making decisions for the future based on these numbers. This is known as management accounting and is a useful tool to ensure business growth.
So there is more to a bookkeeper than just a spreadsheet!
Peace of Mind
Running a business is rarely stress-free and depending on the size of your business, you may be wearing several different ‘hats’ – marketing, sales, HR … you get the gist.
Bookkeepers can help by taking away the stress of the ‘Accounts Department’. Imagine how it would feel at the end of your tax year to know that your books are in order and, in fact, that your taxes have been filed. What a relief it would be to know that those customers who haven’t paid you are being chased. Wouldn’t it be great if someone removed the burden of payroll and PAYE, pension contributions and the like?
By delegating all of these functions to your bookkeeper, you can see your numbers with a fresh perspective which will help you to make decisions on how to move your business forward.
Return on Investment
If you are an SME that is new to delegating functions, you may be concerned about the cost and whether it’s really worth hiring a bookkeeper. Here are my thoughts.
If you don’t employ a bookkeeper to help you with all of the above, you have to do it. I don’t think you set up a business to learn about tax rules and chase people who haven’t paid you. You started a business because you have a product or service that you’re passionate about, that you want to sell and that you think the public wants to buy or use. You should be spending your time developing your business, helping it to grow, being your business’s ambassador at trade shows, networking events or big sales’ pitches.
So, think about the hours your bookkeeper will spend on your business and the opportunity cost of not having one – can you generate greater revenue for your business per hour than you’re paying the bookkeeper, per hour? Almost always, I would say yes you can (even if some of it is intangible such as relationship building).
Bookkeepers can also save you money! Bookkeepers within accountancy firms, on the whole, charge more than independent bookkeepers or bookkeeping firms like Women Who Count. By using a separate bookkeeper, they will have done all the hard graft before you present your accounts to an accountant, if you have/need one, reducing the bill from the accountants straightaway.
Bookkeepers can be a real asset to a business and I am proud to say that I have many clients who have been with me and Women Who Count for over ten years. When I meet a new client or when I’m chatting about what we do, I always come back to the return on investment. Hiring a bookkeeper allows …
• More time for you to focus on the business;
• Cost-saving vs using accountants to bookkeep;
• Peace of mind;
• Compliant accounts and, perhaps,
• A great advisor around the table to help you identify the direction for your business.
Do contact me if you are looking for a bookkeeper – the team and I would love to be involved in helping your business move forward.
10 questions you should ask a prospective bookkeeper.
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