Is DIY bookkeeping holding you back?
Small business owners can enjoy diversity and job satisfaction by being involved in all aspects of their business. Involvement in all areas of your business allows you to use a variety of skills which challenge you and keep work interesting.
Very few operators however, enjoy doing the books. Many business owners do their own bookkeeping under the assumption they will save money. Time spent on the books is less time delivering services to your customers and less leisure time. Doing your own books can also end up costing you more.
“We often see business owners doing their own bookkeeping, who think they are saving money,” said Porters CA Director Simon Terry. “When a client provides financial information to our accountants at the end of the year we usually find errors. This means an owner has been making decisions on incorrect information during the year, then errors have to be corrected by the accountant with a corresponding cost that could have been better spent on accurate work by one of our bookkeepers throughout the year.”
“We want our clients to get the most from the fees they invest in accounting and business advice. We provide our best advice when we have access to accurate and up to date information of our client’s business financials. If a “good” business has poor bookkeeping, we know they aren’t operating to their potential.”
We help set clients up in Xero to make invoicing and bookkeeping easier, however as a business grows many tasks are best left to a specialist bookkeeper to ensure seamless transition of accounts to the accountant. We learn cloud accounting tricks and shortcuts to share with you that you are unlikely to find on your own.
As a business owner you are investing time and energy into a task you may not enjoy nor fully understand rather than focusing on improving your business.
Do you need a bookkeeper?
Poor business decisions
Every day you make financial decisions about your company. Those decisions have an effect on how successful and sustainable your business is. If you’re responsible for the bookkeeping, you could be making errors that affect the decisions you make. You may believe that you have more money in the bank than you actually do or you price a product incorrectly. You may not fully understand how a decision today will affect your business tomorrow.
A bookkeeper keeps track of your company’s financial health. They can also warn you if you’re about to make a financial transaction that could hurt your long-term growth.
Consider that you have a great month with a lot of money coming in so there’s extra cash in the bank account. You might be tempted to upgrade your office computers, but a bookkeeper can warn you that there are upcoming payments the money is earmarked for like BAS, tax payments, rates and bills. A bookkeeper can help you determine the best time to buy those computers, so you won’t suddenly find yourself with a zero balance.
Having correct and up to date information on your business finances becomes even more important if you’re looking to undertake major transactions, such as taking out a loan or incurring large expenses. Your accountant has access to current and correct information on your financial position in order to give you better business advice.
Late transactions
You might think a late bill payment here or there doesn’t affect your business, but the fees associated with late payments add up and missing the wrong payment can affect your company’s credit. That will make it more difficult to get a business loan or credit card.
Worse, you could miss vital transactions in one month that have ramifications for your business the next month or later on. By missing a payment in May, you may think you have extra money that then gets spent—until you notice in June you have to double up on a payment. Late payment of superannuation can have unexpectedly large consequences.
Bookkeepers stay on top of your financial transactions and understand how every transaction affects your business. They can help determine when the optimal time to pay debts is, and let you know if clients are behind on payments.
Keeping on top of bookkeeping means ensuring not only that your bills are paid on time but that your invoicing is up to date and the money is coming in.
Smart business decisions
The information and insight a bookkeeper provides goes a long way to helping you make smart business decisions. Not having a bookkeeper adds unnecessary work to your load, increases risk of error, can have you falling behind with debt collection and increases your stress.
Are you ready for the next step to growing your business?
Call us or make on appointment to find out how we can help make running a business easier.
