Do You Need a Bookkeeper?
Small business owners need to be superheroes when they start out—creative director, marketer, networker, manager, production overseer, bookkeeper, human resources manager, debt collector, IT fixer, cleaner and who knows what else! If you engage a bookkeeper this is at least one area where you can easily reduce your workload.
Sooner or later a business owner needs to start making decisions about where they are personally best engaged in their own business if they really want to grow their business. There are many aspects of small business that can be delegated to existing workers or outsourced to specialist contractors.
Regardless of the nature of the tasks you do in your business, the things that all owners want more of are time, energy and money. Many business owners carry on with the day-to-day tasks of running the operations, without ever stopping to question whether their own time and energy could be better spent elsewhere, for example, making more money by focussing on the things they love doing and are good at and the reason they went into business in the first place!
If you have never inquired into your own use of time and energy in your business, do it now. Be honest. What are the reasons that you hold on to so many areas of business operations? Does it really have to be you? Is trust of others an issue? Is fear of change the issue? Is it that you need to completely change who does what in your business to better utilise the talents of yourself and others? If you believe that you aren’t earning enough yet, question whether you could be making more money if you put your energy into aspects of the business that could expand in order to bring in money, rather than doing your own admin and bookkeeping.
Prioritise Your Time and Energy
- Make a list of all the tasks you do in your business.
- Classify them according to your level of enjoyment and expertise.
- Keep the things you enjoy and know you are good at.
- Get better at doing the things you enjoy but need to know more about.
- Hand over to someone else the things that you neither enjoy nor are good at.
- Consider the equation of time, energy and money. Have you done the sums of outsourcing various tasks to others? Yes, it will cost to engage others to do certain tasks, but you need to think about how you could use your own time and energy more effectively.
Is Now the Time for You to Engage a Bookkeeper?
Many business owners prefer to do the bookkeeping themselves, so they can retain control of the accounts and keep a close eye on operations. Handing the bookkeeping over to an expert bookkeeper will not reduce this level of control or knowledge, in fact it should increase. A business owner should work closely with the bookkeeper to get reports and relevant information as required.
Often a business owner doesn’t know what they don’t know with regard to bookkeeping and compliance. Common issues that owners make mistakes with are incorrect GST codes; incorrect or late payment of superannuation; not following up accounts payable or receivable; incorrect allocation of customer payments; incorrect calculation of employee entitlements; incorrect use of accounts and allocations, for example duplicated sales or expenses leading to inaccurate reporting; and failing to reconcile bank accounts.
Benefits of a Bookkeeper
- More time and energy for the aspects of business you enjoy and are expert in.
- Depend on an expert who is trained in relevant tax law so you don’t have to keep up with changes to ATO, Fair Work Ombudsman, Single Touch Payroll, superannuation guarantee, payroll tax and other legal obligations.
- A contract bookkeeper can be very cost effective, as you are paying either for engaged time or fixed fees for specific results. Assume that an experienced and expert bookkeeper will work efficiently and accurately.
- Less distraction for you. Let the bookkeeper deal with the day-to-day accounting such as accounts receivable, accounts payable, payroll, bank allocations, accounts reconciliations and accurate reporting.
- Your bookkeeper should be an expert in the accounting software that you use. Online software such as Xero is regularly updated with new features. The bookkeeper should know what is relevant for your business and be able to train you in how to use the software effectively for your purposes.
- Having a contract bookkeeper allows you to delegate more tasks as the business grows. For example, you may choose to do all your own bookkeeping initially, but have a BAS agent review and prepare the quarterly BAS. As the business grows, you may choose to hand over in stages other aspects of the accounts, such as payables, receivables and payroll.
- Minimise the risk of fraud. The bookkeeper should alert you to issues, trends, unusual patterns or transactions so you can take action early.
- Get compliance matters taken care of. Let the bookkeeper advise you of obligations in relation to GST, PAYG withholding and instalments, superannuation, payroll tax, taxable payments reporting, end of year payroll and relevant ATO and Fair Work Ombudsman
- Relax! Work with the bookkeeper for the benefit of your business.