Bookkeeping is the most important part of a small business.
Without good bookkeeping habits, your business can be at serious risk. One of the most common reasons that a small business will fail is due to cash flow and, in many cases, that could have been avoided had the business owner not only spent time on their finances but also understood what they should be looking for.
It is not just about keeping track of money but also recording and managing data that will help you to run your business more efficiently.
Bookkeepers are responsible for keeping accounts as well as preparing financial reports and statements. They can be external or in-house and both have their own advantages. But without them, it would be difficult to keep up with all the paperwork required by HMRC or Companies House.
Your business needs bookkeeping, but it is not just a financial function. Bookkeepers are also responsible for keeping records of what happens in your company. This can be anything from the stock you have, customer reports to accounts and invoices.
How easy is it to manage your own Bookkeeping?
If you are thinking of handling your own bookkeeping, then it is probably best to look at the time commitment. A small business owner needs to be able to dedicate anything up to 50% of their working hours to financial matters and that can take a lot away from other important tasks such as marketing or product development.
Why does it up take so much time?
Bookkeeping is a time-consuming process because you are responsible for making sure that everything is done. This includes checking all the details on your invoices and following up with clients if there has been any issues or queries about them. There will also be times when an employee needs to make changes and so they need to know how to do this.
It’s not just a case of putting some receipts in a box, you also have to be good with numbers and quick to spot any errors.
Many small businesses neglect that they need a bookkeeper which is why it ends up taking so much time away from the business owner’s day-to-day tasks. If you don’t have one, then this can lead to some big issues down the line such as missing tax deadlines, reporting incorrect figures, missing invoices that you are owed or invoices that you are due to pay which could ultimately result in a bad business credit history.
The moral of the story is that you need to have a bookkeeper for your small business so they can:
-Save time that would otherwise be spent on doing it yourself.
-Spot errors and missing invoices before they become too serious.
-Make sure you never miss a deadline and end up paying a hefty fine.
Bookkeepers are also fantastic advisors. They know your business finances inside out and are objective so can spot opportunities for the future as well as guiding you in other directions if they think you’re heading for a fall.
Are bookkeepers worth the money?
Well, that’s an opinion you need to form yourself, but you may be surprised to learn that outsourcing isn’t as expensive as you think.
What you need to consider is the cost to your business if you make a mistake or miss an invoice. Would it be worth it then?
Unlike car insurance, bookkeepers aren’t just there as a safety net. They take the stress away from you. Knowing that your finances are being looked after means that you can focus on driving your business forward and that will ultimately mean bringing in more business.
So, in conclusion, it’s not really a matter of opinion. It’s fact. Bookkeepers are worth their weight in gold. Quite literally!