Do you need a bookkeeper?
Posted by Northadvisory on September 30, 2021
As a business owner, there are often many tasks you manage that aren’t directly focused on growing your business.
There is a whole range of day-to-day chores that aren’t necessarily your area of expertise, but you do them because they are all part of running a company.
Managing the finances is one of these areas, and if you regularly have your head buried in your computer reconciling accounts, running payroll and paying invoices, it might make you ask – do you need a bookkeeper?
Here, we look at what a bookkeeper can do and help you decide whether it might be a useful service… or if it’s an easy job to keep in-house.
The difference between a bookkeeper and an accountant
Bookkeepers and accountants are sometimes mixed up and this is where you might need some clarification. While they are both involved with your business finances… there are significant differences between their roles.
A bookkeeper manages transactional activity. They look after your payroll, issue invoices and complete payments as required. A lot of their work involves data entry and making sure that there is accurate record keeping. Part of their role is to track expenses and reconcile them correctly. They usually have an understanding of accounting principles but are not necessarily degree qualified.
An accountant, on the other hand, provides astute analysis of your financial data and often manages your relationship with the ATO. They can help you complete your regular BAS statements and annual tax returns and provide recommendations on effective tax strategies. They also produce many of the important financial reports you need to make key business decisions. Their skills far exceed those of a bookkeeper, and having a good accountant is an essential part of business success.
Some signs you might need a bookkeeper
Understanding the difference between an accountant and a bookkeeper is the first step… but how do you work out whether you actually need bookkeeping services? To help you decide, think about these questions…
Are the accounts taking you too much time? Do you find yourself spending many hours a week following up on financial transactions, ordering stock or chasing debtors for payment?
Are you falling behind on your business transactions? Is your reconciliation list a mile long? Up to date records are vital to make sure you can identify issues and be prepared for your regular activity statements… so, is everything managed in a timely fashion?
Are you sure that your records are accurate? While you may have done your best at completing the tasks, can you be certain they are 100% correct?
Are your tax and other compliance matters complicated? Adhering to regulatory requirements is crucial… this includes superannuation obligations and any relevant business accreditation.
Your answers to these questions will tell you if it is time to consider a bookkeeper. But there’s still one more consideration to think about before you make your decision.
Can you keep doing it yourself?
Modern accounting processes and cloud accounting systems are designed to make life easier for business owners. There are numerous online business accounting programs, such as Xero, that can really take the headache out of doing the bookkeeping yourself.
Sending invoices, reconciling payments, managing debtors, integrating payroll and generating detailed reports are all relatively easy once you have the right software tool. So, before you outsource and spend money on a bookkeeper… it’s worth looking at moving to an accounting system that can help you complete your tasks quickly and easily.
We are here to help…
If you are still unsure about whether you need a bookkeeper… or if you’d like to find out more about moving to a cloud based accounting system, we can help.
The team at North Advisory has extensive experience transitioning clients to using real-time business accounting like Xero. The software is simple enough for anyone to manage, and there are numerous tutorials and support systems in place to help you through it.