Bookkeeping is one of those unavoidable tasks in any business – whether you’re new to business or you’ve been operating for years, there are regular milestones, normally designated by the good people at Inland Revenue (GST, annual accounts, etc.), which require you to be on top of your bookkeeping.
It’s a common occurrence these days, especially with the rise of user-friendly accounting software packages like Xero, for many small business owners to attempt to go it alone and take care of their own business bookkeeping. So, why should you hire a professional bookkeeper to work for your business?
You’re crazy busy and bookkeeping is taking you away from your core business
As the saying goes “time is money”. Chances are if you’re reading this, you’re a small business owner, and you’re potentially the only one working in your business or you might have one or two staff who work directly in the business with you (for example, a small retail store with a couple of part-time staff who work late nights and weekends). Keeping your small business books up to date is just another task that has you working IN your business, instead of ON your business. It’s a simple trade-off, any time you spend raising invoices, entering bills or reconciling transactions is time you could have potentially been working on a money-making task in your business.
Your needs have become more complex
When you first started your business, you might have only had a handful of transactions to manage each month, which were relatively straightforward. As your business grows, your needs will change. More transactions mean the chances of you coming across a transaction type that you’re not familiar with. Unless you have a bookkeeping or accounting background and an in-depth understanding of Inland Revenue rules around income and expenses, you won’t always know what the best way to account for certain transactions is. This can be risky if you’re trying to take care of your bookkeeping yourself as it can potentially result in an expensive bill from your accountant when they complete your year-end accounts and must rework transactions. By bringing on board a professional bookkeeper who is associated with the New Zealand Bookkeepers Association you know you are not only working with someone who takes their responsibility seriously, you are also tapping into a wealth of knowledge that will ensure even the most complex transaction type is being coded and allocated correctly.
You make heaps of mistakes
Some people are numbers people and bookkeeping comes naturally to them, and others are not. It’s important in business to play to your strengths. So, if you find that you’re continually making mistakes with your business bookkeeping, it’s probably time you hire a bookkeeper. This will save you both hours of frustration and the above-mentioned pricey accountant bills when they need to take the time to fix your errors.
In the meantime, check out our bookkeeping tips blog to see if you can minimise any of those errors you are making by implementing some simple processes.
Get a different perspective on your business
Nobody knows your business better than you do. However, sometimes it is so easy to get so caught up in your business that you can’t see the wood for the trees. By bringing a bookkeeper into your team, you know that you have someone regularly reviewing your transactions. Any bookkeeper worth their salt will soon get a feel for your business and pick up on trends, identifying issues early and giving you valuable time to head these off before they become too big.
Maintain cashflow
Cash is king! Cashflow is the lifeblood of your business. One of the simplest ways to ensure that this is under control is by implementing an account receivable process that ensures you are invoicing on time. As a small business owner, it’s easy to get caught up in everything else you have going on and forget to invoice a client. For example, one business we have started working with this year had not invoiced a client for work completed eight months earlier. Not only could that business have had the benefit of that money months ago, but the longer you leave it to invoice a client the higher the chances of that invoice not ever being paid become. Bringing on board a bookkeeper who can help you develop an accounts receivable process, will mean that clients are invoiced as soon as tasks are completed (or within whatever timeframe you have agreed with your bookkeeper) and also that when clients do not pay their invoices, your bookkeeper is following up to find out when payment will be made.
Ensure correct tax filings
Two things are certain in life, death and taxes. I’ll leave the subject of death to the morticians, but I’m sure when it comes to taxes you don’t want to be paying Inland Revenue any more than you absolutely have to. You want to ensure that every time a GST or PAYE deadline rolls around, you’re paying on time and therefore paying any penalties. One of the benefits of working with a bookkeeper is that they pretty much set their internal clocks to tax due dates – they are working with other people who all have the same deadlines as you, and it would be almost impossible for them to miss the deadline to file and pay.
You’d rather be in Hawaii
Ok, so I’ll admit hiring a bookkeeper doesn’t automatically get you a return trip for two to Hawaii. Although, that would be a great onboarding gift to receive, wouldn’t it? But I’m sure for most small business owners there are plenty of things they’d prefer to be doing than keeping on top of their bookkeeping. With one less task to worry about, you will not only gain the time you would have been spending on your bookkeeping, you’ll also gain the brain power you would have used thinking about needing to do your bookkeeping. I’m sure when you’re taking your dog for a walk, playing at the park with your children or having a romantic candlelit dinner with someone you love, they’d like you to be present in the moment with them and not worrying about your business bookkeeping.