Why You Need A Bookkeeper
Hiring a Bookkeeper may seem like an unnecessary expense in the current economic climate but, as is often the case, sometimes it is wiser to spend a little money to make a lot more. Not only does it take a great deal of stress and effort off your shoulders, but it allows you to focus on the important thing – your business.
It can be risky for some businesses such as partnerships to entrust the accounting to one of the partners. Accusations of misconduct could potentially ruin your working relationship, even when an error in record keeping is unintentional. Having an expert in place not only means such errors are less likely but there is no suggestion of malfeasance.
A sole trader may find himself in the unfortunate position of having to make a choice between what is best for himself and what is best for his business. This isn’t to say that he wouldn’t put the business first, but others within the company might question his intentions if things go awry. Using an independent bookkeeping service avoids this and boosts confidence that all accounting statements are true, accurate and without bias.
With more than one founding partner, issues could arise where each partner has some idea of how the money should be spent and how to easily access it. Otherwise, conflict could arise that could impede the progress of your startup. Your bookkeeper will be an independent voice with their first loyalty to the company not an individual . Ideally they should be the financial gatekeeper, creating the necessary approval processes that stop partners from just withdrawing money.
Entrepreneurs and Admin Don’t Always Mix
It may be an uncomfortable fact but most entrepreneurs are, by definition, creative people and – not the type to enjoy routine admin. They are normally so busy chasing sales and building the business that paperwork often ends up shoved in drawers on the basis that “out of sight is out of mind”. The consequences of doing this with your accounts can be severe.
It’s hard to get excited about payroll and taxes but the chances are your bookkeeper enjoys those tasks, so it makes sense to pass them on to someone who does them well.
The last thing you want is an investigation or to have the taxman after you just because you forgot your quarterly or annual tax filings. Depending on the type of business structure you’ve created for your business you will have many differing tax requirements, including estimated tax payments, corporation tax payments, VAT, not to mention dealing with contractors and freelancers. A good bookkeeper will be able to handle all of this for you and will keep up to date as requirements change.
Advice And Experience
If you don’t have a background in finance and bookkeeping that lack of experience can cost your business dearly. Late or missed payments will impact both on your cash flow and your reputation. Poor invoicing and credit control will ensure your business does not survive. It is wiser to spend your time on the parts of your business you know best.
It is very easy to make mistakes when ‘doing the books’. Even with modern methods of capturing data it is still easier to make mistakes than one would like. The expertise of a good bookkeeper means it is less likely that they will make mistakes and if the do, it will be spotted fairly quickly, recognised for what it is and put right.
Outsourcing your bookkeeping gives you the best of both worlds, you will have a focussed expert who can do the job and give you sound advice whilst not be distracted by the day to day minutiae of the business.
Letting It Go – Delegating
The most valuable commodity we have at our disposal is time, it is the only finite resource. Outsourcing your bookkeeping operations frees up valuable time that can be put into building your business. Administrative functions can be a huge distraction. It is neither practical or possible to outsource everything but where you can you should.
Many successful entrepreneurs say that the secret of success is learning to delegate – you focus on the things only you can do and hand over as much else as possible to trusted contractors and employees. You cannot ignore your bookkeeping, nor should you or you store up future problems but it is a discrete function which you can hand over to an expert.
Turnover And Cash Flow
No sales = no business. No payments = no business. A bookkeeper will manage your cash flow for you, making sure you are both paid and pay on time, both are equally important.
It’s all too easy to let admin tasks slip when you are building a business, you don’t have a need for a full time bookkeeper but you do need some help. In an ideal world your freelance bookkeeper will be flexible and able to give you more hours when you need help most and throttle back when you don’t need so much. You can scale as and when needed.