If you want your business to thrive then you need to make sure that you know exactly what is going on with your finances.
Many small business owners make the mistake of assuming that they don’t need to pay much attention to their finances until they need to do their accounts.
This leads to long workdays and sleepless nights as they try to get their accounts together, and then they find themselves struggling to figure out where the money went.
Hiring a Bookkeeper Keeps Your Finances Straight
Bookkeeping is the practice of keeping track of what is going on with your businesses finances on a day to day basis.
A bookkeeper will help you to record every bit of income you have, and where that income is spent.
You can track regular expenses, purchases, accounts receivable and other aspects of your business in multiple ledgers.
This is will allow you to get a clear profile of the financial activity in your business.
Having a bookkeeper makes it easier to file your tax returns, too, since all of the details of your business accounts are ready for you to fill out.
Bookkeepers vs Accountants
Bookkeeping is not the same as accounting. A bookkeeper records the details of your financial activities, while an accountant reports on that data and interprets it.
Bookkeeping is a separate skill to accounting.
Bookkeepers log financial activity and can submit the completed books to an accountant who can then use that information to create reports.
You do not need an accountant to work on your bookkeeping. Some people do their own books. Some people hire a bookkeeper.
Either way, having neat, organised and correct books can help to make your life a lot easier.
This means that if you hire an accountant they will be able to do their job more quickly which means it is likely they will charge less.
If you present an accountant with a stack of receipts and bank statements, then you can expect a massive bill for them for organising that information to produce your accounts.
DIY Versus Hiring a Pro
Many small business owners do their own books. As your business grows, however, it may become time-consuming to do this.
Why would you want to spend your time doing your books when you could spend that time focusing on your own special skills and your core activities?
You aren’t a bookkeeper by trade, so it will take you longer to do the job properly than a qualified bookkeeper.
If you are a physiotherapist, mechanic, graphic artist, or whatever else your special skill is, that is what you should focus on.
Your time is best spent doing R&D, or working on giving better service to your customers or honing in on your skills and finding ways to grow your business.
Books, accounts, managing bad debt, etc, are all things that are a distraction from your business.
While you can hire a bookkeeper for a few hours every now and then to get your accounts in shape, you will probably find it more cost-effective and less time consuming to have one on an ongoing retainer.
They will probably only need to do a couple of hours of work each month (or more, if your business is quite busy), which allows you to stay on top of your finances.
You may also want to ask your bookkeeper to recommend an accountant that can help you with your reports at the end of the financial year.
Most small businesses don’t need a full-time employee to handle their finances.
However, outsourcing to a bookkeeping agency is a good way of keeping your records organised without spending a fortune.
It will give you peace of mind that your business is on the right track.
If you are looking for a blend of truly personal service and expertise, please call us today on 03 9510 2120 or contact us through our website https://numberspro.com.au/contact-us/