Should I outsource my bookkeeping?
I work with two kinds of clients. There are the business owners who are excellent at what they do but the thought of dealing with their bookkeeping and finances is enough to make them start sweating and send them into panic. Then there are those who do their own books but for a variety of reasons, decide to contract a bookkeeper.
Here are my top 5 benefits of a good bookkeeper.
When I had my own restaurant there were simply not enough hours in the day. We were a limited company and so had an accountant and they also did our payroll. We were in Brazil and to be frank, I hadn’t the faintest idea on employment law or work-time regulations in Brazil and had no time to learn about it so there wasn't much option. I was however adamant that I would do the bookkeeping myself, this was many years ago, and long before I trained to be a bookkeeper.
I would have saved myself so much time if I had outsourced my bookkeeping. There was never enough time in the day and other tasks, which I was unable to delegate, wouldn't get done. Let´s face it, one of the perks of having your own business is the flexibility of being able to have a work-family balance. I look back now and wish I had done things differently. I wish I had allowed someone to take on the burden of the paperwork so that I could have focused on growing my business or had spent those evenings with my family. I would have been so much more productive.
It's that age-old phrase "time is money" again, but the reality is that if you are spending less time sorting out paperwork and payroll, then you can spend more time doing what you do best.
Another advantage of outsourcing your bookkeeping is that most bookkeepers offer a variety of payment methods. This means that you do not need to employ someone, you do not need to worry about them being off sick, going on holiday or contributing to their workplace pension. You pay for what you need.
I have spoken to many accountants and bookkeepers who, at the end of the financial year, have to charge their clients more because they have made mistakes in their books for which they are then billed for to correct before preparing the end of year accounts and reports. This can be extremely costly and frustrating. A qualified bookkeeper is considerably cheaper than an accountant and so if finances are not your forte, you can save money by paying a bookkeeper to get it right from the start.
3. Expertise and advice
A good bookkeeper is up-to-date with changing legislation and accounting software developments. They also have the experience and have worked with many businesses before yourself. This can prove invaluable in helping you avoid the pitfalls that other people have made.
4. Cash flow
Even when the sales are high, your business will not survive if you do not have anyone keeping on top of the invoicing and credit control. There is nothing worse than forgetting to send an invoice or being too busy that it is delayed by a few weeks and then you must wait 30 days plus to receive your money. This could have terrible consequences on your cash flow. Also, there are often those difficult clients who you have to chase after for your money, which can be both uncomfortable and time-consuming. A good bookkeeper will keep on top of both of these tasks for you.
5. Software limitations
I am a big fan of the accounting software and apps that are available on the market. They can save so much time and with being accessible on smart phones and tablets, your finances are available to you at the touch of a finger. I can send out my invoices whilst at the airport or sat on a train, it’s so practical.
There are obviously limitations with all of these though. For a start, you still need to do the data entry, there is no escaping this, although once you learn how to use your accounting software or app, to record your expenses for example, you will wonder how you managed before without it.
The software obviously cannot sit and interpret all of the various reports for you or explain how your cash flow is looking and ways to improve it, although the information, graphs and charts they produce are obviously invaluable. A bookkeeper can sit down with you and you can go through this together, then you will really start seeing the benefits to your business.
Another extremely annoying limitation of some software out there is that they do not automatically link into your business HMRC account. Therefore, for example, your VAT return figures and the submission of HMRC payroll documents still need to be done manually. Don’t make the mistake of doing your VAT return on your accounting software thinking that that is it submitted if your software does not automatically connect to the HMRC. That could be a very costly pitfall.
The above is by no means an exhaustive list of all of the reasons as to why outsourcing your bookkeeping to a qualified bookkeeper could benefit your company but I find most of my clients contract me for one or more of these reasons. If you would like your business to benefit from outsourcing your accounts call Rebus Bookkeeping on 07720910886.
If you would like to leave a comment or a question then I would love to hear from you.