7 reasons to outsource your bookkeeping
Posted on 29th June 2023
There are some very good reasons to outsource your bookkeeping.
1. Healthy financial records
THave you ever asked yourself which ‘books’ your bookkeeper actually looks after? Normally, they take care of financial information about:
what you own and cash you have in the bank
your income and sales invoices
your purchase invoices and receipts.
If your business deals with a lot of small receipts and payments it’s difficult to keep track. However, falling behind with this information could mean you’re unaware of possible problems along the line. Payments to you might be overdue and you could miss important bills as well.
2. Figures at your fingertips
With accurate bookkeeping and useful financial reports, you’ll have a snapshot of your business health at your fingertips. When you need to make decisions, up-to-date information allows you to make them quickly.
3. Quality comparisons
When all your financial information is managed with accountancy software in the cloud like Xero, it’s easy to compare figures. You can look at this month’s performance and the previous month, or the same month last year, for example. Opportunities and possible risks are clearer, and you can take action in good time.
4. Planning ahead
Looking ahead and planning the future is important for all business owners. Patterns and trends in your financial records help you to make realistic predictions based on past performance.
Your bookkeeper keeps an eye on the details so your information is accurate. You can make sure your plans include all your major expenses for staff costs, equipment, insurance, tax and VAT.
5. Controlling credit
Sending out invoices is only part of the story. You need know payments are received, or you’ll run out of money. Your bank might start to see you as a risk and withdraw credit arrangements. If you need a loan or investors, they’ll want to see that your business cashflow is healthy.
With regular reviews of payments received you can quickly deal with any that are overdue. If some customers’ payments are slow or unreliable your bookkeeper can help you take control. An aged debt report quickly shows you who to put on hold until they settle their accounts.
6. Exacting expenses
You might have dozens or even hundreds of items to buy for your business every month. A backlog of receipts and no time to catch up are common problems.
Controlling your expenses is as important as making sure you receive regular payments. For VAT registered companies, for example, deducting VAT on purchases reduces the amount due to HMRC.
It’s so easy to lose receipts and to forget what you’ve spent. You could miss important opportunities to reduce your tax bill because you haven’t claimed all your allowable expenses.
7. Compliance
Properly trained and qualified bookkeepers keep up to date with the latest rules, regulations and best practices. They make sure your business is compliant under the Companies Act, and for tax, payroll, VAT, Companies House and anti-money laundering regulations, for example.
Outsourced bookkeeping services you might not know about
Bank reconciliation shouldn’t wait until the end of your financial year. It will take much more time to match your income and expenditure to your bank accounts. Documents can go missing and expenses are easily forgotten. Your bookkeeper can take care of this.
If you’re a contractor in the construction sector you know that the Construction Industry Scheme (CIS) is rarely straightforward. Your bookkeeper can help you manage this and your payroll requirements too.
Most importantly, a good bookkeeper is part of your team. They will understand how you work and the financial information you need to keep your business running smoothly. They will often notice unusual transactions very quickly and let you know, so you can take action.
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