Should you do your own bookkeeping?

Your business is all about your skills and passions. You didn’t start it because you want to learn to be a bookkeeper. However, you need to manage your finances properly to be successful. 

 

If you don’t have a financial background learning to look after your business accounts will be time-consuming. That means you’ll be focussing on your bookkeeping when you could be expanding your business. Where would you rather spend your time? 

 

Good bookkeepers are trained, experienced and very knowledgeable about good accounting practices. They will be attached to a recognised accounting body like the Association of Accounting Technicians (AAT). 

 

This means they have recognised professional qualifications. Licenced members must meet high standards of ethics and accountability. Thanks to continuing professional development (CPD) they also stay up to date with changing technology, regulations and requirements. 

 

They can give you good advice and make sure you meet your financial obligations. 

 

You will soon find that a spreadsheet on your laptop isn’t easy to maintain or use. To keep track of your finances you’ll need to spend time creating charts and running reports. Otherwise, you won’t have a complete picture of your business. 

 

In contrast, good financial processes and record keeping set up by your bookkeeper will help you run your business. You can see how much money you’re making and what you’re spending. More importantly, you’ll know the information is accurate and reliable. 

 

Do you have a drawer, shoe box or carrier bag full of receipts that you haven’t yet recorded and filed? This is a clear sign that a bookkeeper can help. 

 

You could be missing opportunities to reduce your tax bill because you aren’t claiming all your allowable expenses. If you’re registered for VAT, you might be paying too much. 

 

Good bookkeepers use accounting software in the cloud and can quickly set up an account for your business. 

 

They’ll show you how to create quotes and invoices and keep track of your bank accounts, all in one place. You can even send automated payment reminders to your customers. You’ll be able to view and update information wherever you are. 

 

When things get busier your bookkeeper can take over the day to day updates and reconcile your bank accounts. They’ll quickly notice any unusual transactions or errors so you can take action, if needed. 

 

Managing cashflow is important for every business, especially in the early days. Simply checking your bank balance doesn’t tell you whether your business is healthy. 

 

Bookkeepers understand some people don’t like to work with numbers. As well as keeping your financial information up to date they’ll clearly explain what the figures tell you. 

 

You’ll know who has yet to pay their invoices and which bills you must settle. You’ll be able to set a budget and see projections of your income and expenditure. When you’re ready to expand you’ll have reliable information to help you gain investment or a loan. You’ll also have more time to spend supporting your customers and growing your business. 

 

If you already have employees or are thinking of recruiting, managing your payroll is important. If you get it wrong it can disrupt your business and take a long time to resolve. 

 

A bookkeeper can add new employees and process people who are moving on. They can handle your weekly or monthly pay runs and all the necessary paperwork for HMRC. You’ll have a full picture of the tax and National Insurance Contributions (NICs) to be paid. 

 

If you are a contractor or use contractors affected by the Construction Industry Scheme (CIS) your bookkeeper can manage the details and claim rebates promptly. 

 

When your financial records are accurate and up to date you can predict your business and personal tax bills. You can regularly put money aside so you know you’ll be able to pay. 

 

As the government moves ahead with its Making Tax Digital plans you’ll also know you’re managing your financial information using ‘compatible’ software.