If you’re in business, then you need a bookkeeper…….

Yes, that’s right, this post is directed at everyone in the position of being a business owner, be it via a limited company, a sole trader, or a freelancer. No matter what you do, whatever trade you are in, from builders to florists to web designers all the way to accountants and bookkeepers themselves.  You need a bookkeeper.

Specifically, this is directed at those of you who believe you can do it yourself, or feel that it’s the only option in order to keep costs down.  You’ll be saying things like:

• “I’m smart, I can figure this out”
• “It’s not too bad when I get around to doing it”
• “Why pay for something I can do myself”
• “I’m trying to keep costs down – why would I spend money if I don’t have to?”

Well, my belief remains the same, you need a bookkeeper.  And I intend to share with you 7 key reason why you need one, followed by some suggested steps you can take in order to get your bookkeeping needs taken care of.

Reason #1 – Its Your Time, And Its Valuable

This is a big one.  And the obvious one.  The one that probably has you nodding your head along in resigned agreement.  Every business owner knows the concept of “Time is Money”, and will probably wholeheartedly agree that they should be spending their time earning the money or devising new and better ways of earning the money.  And that’s where many of us then sigh, and say “but………”

I’m guessing you’re reading this because deep down (or not so deep…), you know you need a bookkeeper (or would love to have one).  You’re waiting to be given a reason that you can’t give a “but……..” answer to.  A reason to actually start seeing your time as valuable and worth something to you and your business.

Well…… All the reasons below link in with this one.  So, you need to grab yourself by the scruff of the neck and focus in on the fact that:

• You created this business. With hard work and a commitment of your time you have been able to create a viable business.  Your time has created real value.
• You can go out and earn money through your business by delivering a valuable service or selling a product to your clients and customers. This is your time creating money for you.
• You know your business inside out. You know what you want to do with it and you can work on your strategy and growth plan in order to achieve this.  This is your time creating future value for your business and future income for you.

This is where your time needs to be spent.  Creating value within your business and working on current and future income streams.

Are you on-board with this?  Do you agree?  Well then, let’s continue.

Reason #2 – Stick to What You Know

Repeat after me – “I am a business owner, I am a business owner” – say it over and over again.  What does that tell me?  Well, assuming that little mantra hasn’t made you scratch your head in utter befuddlement, it tells me that you know some stuff, and that you’re pretty damn good at some stuff also.

We’re all good at something, and that tends to be linked to the things that we know.  The things that we know very well.  As a business owner, the likelihood is that you are a master or expert in your niche, or at the very least, an aspiring master and expert.  Your time should be spent furthering your knowledge and enhancing your skills in that field, as that is where your income is coming from.

Does that knowledge and expertise stretch to bookkeeping?  Most probably not.  So any attempt to undertake this work is likely to be frustrating for you and a struggle.  You will not be able to work at the same speed as you are used to working and chances are you will not complete the work to the same level of quality as you’d expect from a bookkeeper.

Bookkeeping is a vital function within all businesses, and if you don’t have a strong background in accounting or tax matters, then you should be seeking out the professionals that do have that experience – people who are masters and experts at doing bookkeeping.  They’ll be able to complete the work quicker, with greater accuracy and be able to provide insights into how you are performing financially that you may not have picked up on.

Allow yourself to work on your business, to grow and succeed, not in your business, getting bogged down with day to day functions.

Reason #3 – Be the Boss

Following on neatly, its back to that mantra “I am a business owner”.  So be one.  Be the boss.  Be a leader.  Have the courage to delegate important tasks and roles within your business to others.  Have the faith that your employees or sub-contractors will rise to any challenges you set under your leadership and guidance.

If you are able to do this you will be rewarded with a strong team around you that makes your business more flexible, more responsive and quite frankly, better.  Who wouldn’t want that?

With your bookkeeping specifically in mind, delegating these duties to a suitably qualified person/team, you will be rewarded with:

• Having a certified user of your accounting software which eliminates the data inputting errors.
• Knowledge of software that integrates with your accounting software that can be of benefit to the business.
• An excellent source of information regarding tax allowances.
• Input into the design, maintenance and reviews of your internal business processes and procedures.
• Highlighting of issues in the near future regarding the cash-flow and financial health of the business.
• A different perspective of your business.

A good boss and leader knows that they don’t know everything.  They understand that they can’t fulfil every function within their business.  They know that they need to make a positive effort to bring that knowledge into their business from either an employee or a sub-contractor.  These are the bosses and leaders who will succeed as business owners.

Reason #4 – Its Cost Effective

Okay.  Lets tackle one of the biggest stumbling blocks you and other business owners might have when it comes to the paying for the bookkeeping function.  The urge to keep costs down and be as frugal as possible is a key reason many business owners decide to take the task on themselves.  You probably fit into one of these categories:

• There simply isn’t enough work to justify employing anyone to do the job.
• There’s enough work, however the cost of employing someone to do it is too high.
• You’ve assigned someone to do the books, but its really not working properly or efficiently.

I believe the accounting function within a business is similar to the I.T function, in that, how big does your business need to be in order to justify having an accounts or IT department or even an accounts or I.T employee.  In employee terms you either have one or you don’t.  And if you can’t justify the appointment of an accounts employee, then what is your middle ground?

Doing it yourself until you can justify employing someone can be a real drain on your time (which is valuable time don’t forget) and you risk making expensive errors that could significantly effect your business (its not what you know or do best after all).

The solution?  Look to outsource your bookkeeping.  Steer clear of paying an hourly rate and look to negotiate a fixed fee per month or a transactional fee basis (paying per invoice logged, bank line reconciled etc) so that you can budget for the cost effectively.

If you are able to outsource the bookkeeping to your accountant, then negotiate a reduction in the production of your annual accounts and tax returns as the job has become easier given they are doing the bookkeeping also.

Reason #5 – It Gives You Peace of Mind

So what does a bookkeeper actually do for you? What peace of mind do you get so that a late night panic doesn’t keep you awake because you’ve forgotten to do something important.  Well, to name but a few:

• Statutory deadlines will be met whether they are monthly, quarterly or annually. You will know that all requirements will be met prior to any submission deadlines to HMRC or your accountant.
• It reduces the scope of any errors being present in the reported accounts and tax returns.
• Keeping track of all expenditure items to ensure that you are able to claim all of your allowable costs and be able to evidence it if required.
• Correctly accounting for expenditure items as either a current cost or a fixed asset that needs to be depreciated over a number of years.
• Improved cash-flow as there is always a focus on which clients owe you money and what needs to be done about it.
• Ensuring that digital copies of all invoices and receipts are maintained in an easily accessible format.
• Your records will be kept up to date on a regular basis, meaning that you’ll have relevant information about your financial position always at your fingertips.

Never underestimate the value of knowing you can rely on someone else to undertake important tasks on your behalf.  Instead of fretting over it yourself and it cluttering up your mind when you need to be concentrating on more strategic aspects you can schedule regular catch ups where your bookkeeper provides you with the assurance that all the work is being done or has been done and you can ask any questions about the numbers.

Reason #6 – Shake Off the Boredom

You can say it.  I won’t take any offence!  Bookkeeping and Accountancy can be dull.  Tediously dull for many people, probably the majority of business owners.  You know the importance of it, but do you really enjoy any of it?  When was the last time you woke up filled excitement at spending the day working on your books? Sifting through that big pile of invoices or cross checking everything against your bank statement.

As a business owner you should be driven by what you are passionate about.  The passion that made you create this business in the first place.  The passion that makes you want to elevate your service or product to be the best offering of its kind out there, and then to make it even better.  The passion that is needed to make your business succeed.

Your Bookkeeping and Accountancy are vital components within your business.  But they are not its passion.  Don’t dull your creative juices and diminish your passion by getting stuck in accounts boredom.  Besides, us numbers folk, we like that kind of work.  It makes sense to us, its what we know and its what we do – with passion and motivation.  And that’s always going to be better than struggling through it yourself when you’d rather be doing pretty much anything else.

Reason #7 – Find the Balance

This can apply to so many aspects of your business for you.  You put your life and soul into it to give it the best chance of success – but there’s only so much time that you can give.  And if you give everything, what personal cost does it take from you? How much time do you get at the end of the day or the end of the week for yourself or your loved ones?

There is a balance that needs to be found between your work/business and your life.  You want to be in the position in 10-20 years time no doubt to give your family everything you want for them, but at the same time you want to surely have experienced life with them during that time also – and properly experienced it.

None of us want to have that realisation that we’ve pushed so hard that there is nothing left to give or that our health (mental and physical) has suffered as a consequence.  But that seems to be a regular occurrence within business culture – and to what end?  Being utterly exhausted and your overall work levels and performance being impaired to a point that it negatively effects your business – and then the knock on effect on your personal life.  No thanks.

Now, don’t get me wrong (and before I get ridiculously carried away with the health benefits of having a bookkeeper…….), delegating or out-sourcing your bookkeeping to someone else isn’t going to miraculously keep you healthy and avoid burn out.  But its one step that you can easily take.  And if you replicate that philosophy with the different functions within your business you put yourself in a much better position to be able to find that balance.

So What Next?

Glad you asked! Well, look around at what you have first.  Do you have anyone in your business or do you know anyone that has bookkeeping experience?  Do you want to train someone up into that position (though the time and cost of training needs to be factored in here)?

If you don’t have anyone suitable, or you need something more cost effective and straightforward than employing someone then have a look around for a bookkeeping service that could offer you the exact services that you need (like this one) or contact an accountant (like me!) to find out about a combine bookkeeping and accounts package that can save you money.

Some advice:

• Don’t go for the cheapest option – This is a professional service where you want the expertise that will deliver all the benefits listed above – “You get what you pay for” rings very true here.
• Make sure you have some decent accounting software in place. Xero and Quickbooks online are two of the leading software packages that are both reasonably priced and most bookkeepers should be able to use.  If you don’t have any software, your accountant or bookkeeper will be able to arrange this and set it all up for you.
• Invest in some automation software like Receipt Bank – which automatically populates your accounting software with invoice details based on a picture of a receipt or from an e-mailed receipt.

Conclusion

If you are a business owner that still does their own bookkeeping then you need to stop.  There really is no argument for continuing to do so when you could be making far better use of your time.

And the benefits mentioned throughout this article (focusing on your growth, being the boss, getting peace of mind, shaking off all that boredom, and not forgetting working towards a positive work balance) are all within your grasp.  You just need to take that first step.

And if you are in the position of needing to take action, I’d love to hear from you to see if I can help you reap these benefits.

Have you been in this position and acquired a bookkeeper? Did you experience any of these benefits? Do you have any other reasons to add?