Do I Really Need a Bookkeeper for My Small Business?
Running a small business is no easy feat and there will be times when you need professional help. When it comes to business finances, you want to be confident that every penny is working hard. How can a bookkeeper make this happen?
There’s no denying that 2020 was a difficult year. Businesses that did survive lockdown and local restrictions over the course of the year have found trading conditions brought mixed blessings. For some businesses, large and small, the trading conditions were too much to bear, forcing many high street retailers to close their doors. Even with online orders increasing, surviving during the pandemic has been more than tough.
And these conditions look set to continue. Matched with continuing uncertainty, even the most astute business owner will be entering into 2021 with a mix of agile business planning and crossed fingers.
Whether your finances are stretched or not, a bookkeeper will all the difference to your small business. Here’s how…
#1 Day-to-day account management
Let’s be honest, it may only be a few small tasks but somehow, they never quite get done… a bookkeeper can keep on top of all these tasks form tracking sales and expenditure, chasing slow payers and reconciling accounts.
In other words, a bookkeeper can keep on top of your business finances so no matter what the trading conditions, you have an up-to-date overview of your finances.
#2 Flag inconsistencies
The thing with being so busy and putting your business finances to the back of the queue is that by the time you’ve noticed inconsistencies, they can be many weeks (or months) old. The problem with this is getting inconsistencies sorted. They can be difficult to trace and even though you think you’ll remember why you charged what you did etc., in a few months you simply won’t remember!
#3 Stay compliant
There are various regulations and issues relating to business finances. Unfortunately, HMRC and the VAT Man do not take kindly to payments being late. A bookkeeper will ensure you remain compliant.
#4 Tax and VAT payments
The way businesses and sole traders pay tax has changed a lot in the last few years, with businesses and sole traders now able to spread their tax bill. VAT can also be paid quarterly, giving businesses a chance to stay on top of payments rather than having one large payment at the end of the year. A bookkeeper, along with a cloud-based software such as Xero, can keep on top of how much your business owes.
#5 Manage accounts payable
Your bookkeeper can handle paying suppliers too. If there is a cash flow problem - and many businesses have weathered this during 2020 - they can also be the person who works out a payment plan with suppliers. This balancing act is crucial for businesses under pressure to survive.
#6 Send out invoices and trace payments
Sending out invoices is only part of the story. You need to trace payments, as well as making sure that anyone who owes you money makes regular payments.
#7 Financial reporting
From Profit and Loss to balance sheets and cash flow projections, your bookkeeper can provide you with a range of financial reports, all of which hold valuable information. As well as giving an accurate overview, these reports can also be useful when applying for business loans or investments.
#8 Manage payroll
Whether you employ one person or 11, paying them on time and correctly is key. A bookkeeper will be part of this process. Again, staying on the right side of HMRC is important.
#9 Liaise with your accountant
A bookkeeper keeps your everyday finances in order. Your accountant is the professional who will keep your tax liability to a minimum, applying the latest tax breaks and rules to your accounts. Working together, you get the best for your business finances.
#10 Get you best deals on everything from utilities to phone deals
If there is one thing every business needs in 2021, it is the best deal on everything from phones to utilities. Reducing overheads is something that a bookkeeper can help you to do.
