It is understandable that during the current economic downturn that a number of businesses are always looking for ways to save money. Most businesses understand the equation of reducing cost in order to maximise profits. The difficulty occurs when deciding what items should be cut back on in order to save money. Or alternatively a business owner may develop a do-it-yourself attitude. It is not uncommon for business owners to take on extra responsibilities in order to cut costs. Hence most business owners become ‘Jack of all trades.’
Invariably one of the tasks that business owners decide to tackle themselves is bookkeeping. On the surface it looks uncomplicated, also there appears to be little that could possibly go wrong. From an accountants perspective it would be fair to say that the average business owner knows very little about the process of bookkeeping. We would therefore always advocate using a professional bookkeeper. From Her Majesty’s Revenue and Customs (HMRC) perspective it is a legal requirement for self employed people and companies to keep accurate bookkeeping records. There are penalties for submitting inaccurate records. Pleading inexperience or ignorance is not an excuse.
So what does a bookkeeper do?
A bookkeeper is the person that manages your business day-to-day financial transactions by recording, calculating payments, invoices, payroll, revenue and other critical business transactions. Thus, it is essential to hire an astute and experienced bookkeeper who can save you time and money. The role of a bookkeeper is to interpret financial data and help the business owner to make informed day-to-day financial decisions.
How to find a good bookkeeper for your business
- First and foremost look for a person that is either professionally qualified or has a considerable amount of relevant experience.
- Take the time to discuss the competencies that a good bookkeeper should have. A skill such as being computer literate and being familiar with different bookkeeping software programmes is essential.
- A bookkeeper must be able to complete business compliances such as managing a payroll and ensuring incoming and outgoing invoices have been satisfied.
- It is essential to evaluate the person’s bookkeeping experience. Always ask for references or to speak to other clients. Likewise it is important to take the time to check for authenticity and a track record before any offer of employment is made or contract signed
- Review interpersonal and communication skills to ensure that the person is able to make a positive impression on behalf of you or your business.
Knowing what you have spent or whether you can expect a profit or a loss from your business is vital. Staying on top of bookkeeping whether it’s for a multi-billion pound business or for a small business is a necessary activity on a daily basis if you are intending to make a success of your business. Not doing so can mean anything from unpaid invoices to overspending. Both scenarios can be damaging for business.