This is a question that I’m sure all business owners ask themselves at some point and below are some things which are common to all businesses that could indicate it might be time to look at hiring a bookkeeper.
Time
When you start a business it’s because you wanted to spend your time doing whatever it was that made you want to start a business. However, you may:
- find yourself not focusing on your business so that you can keep up to date with your bookkeeping yourself,
- find yourself spending hours in the evenings doing your bookkeeping, after having already spent a full day working.
- Or worse still you will just ignore your day to day bookkeeping and hope that it somehow magically sorts itself out (hint – it never does).
If any of these three are your current situation it almost certainly is time to look at hiring a bookkeeper.
Knowing how your business is performing
If your books are not up to date there is no true way to know how well your business is doing. Did you make a profit last week, last month, last year? Was your last job profitable? How much money is currently in the bank, and is it enough to cover your current payables? Do you have inventory available? Should you order more? How much of your bank balance should be held to pay amounts owed to the ATO? Have all of your invoices been paid by your customers? These are all questions which can only be accurately answered if your books are kept up to date and accurate, and this is before you start talking about assets, investments, loans, payroll or hiring sub-contractors.
Your bookkeeping or compliance is getting complicated
As your business grows so does the volume and complexity of your bookkeeping requirements. As you employ staff, or utilize sub-contractors, or the amount of inventory you hold increases there are requirements which all make for more complicated bookkeeping and compliance. Things which were once simple such as ensuring you’ve recorded all invoices from a supplier become harder as the volume of purchases may increase. Reconciling your bank account becomes a larger task as the number of transactions increase. Regularly employing sub-contractors can attract superannuation. These are all things which may have not been an issue early on but can become difficult or burdensome as a business grows.This is where you can hire a bookkeeper and know that the books are managed accurately and on time.
“My accountant has always done it at year end for me”
Accountants are good at what they do, and are definitely qualified to do bookkeeping, however they do tend to charge a higher hourly rate than a bookkeeper would meaning you ultimately end up paying more for the same amount of work to be completed.
Whether its compliance work or day to day data entry tasks a good bookkeeper will almost always be able to do the work for a lower cost than an accountant. Although it also pays to not just go with whoever quotes the lowest hourly rate. Ensuring that whoever you use is qualified, registered with the Tax Practitioners Board and has appropriate insurances is more important that saving a few dollars per hour.
You are not sure if you are doing it correctly
If you have any doubts about whether you are doing things correctly you are far better off seeking help then continuing as you are and finding down the track that you were doing it incorrectly all along. The cost involved in correcting years’ worth of incorrectly recorded transactions will be substantially higher than if you had hired help in the beginning. A good bookkeeper will be happy to review your books and let you know if you are on the right track.
Your accountant will love you for it
Accountants can get exceptionally busy at end of financial year as everyone is looking to have their tax lodged. If you are dropping off a shoe box full of invoices and receipts to your accountant expecting them to lodge your tax you are placing unnecessary pressure on them as well as paying more that you would have if they were recorded throughout the year. Hiring a bookkeeper becomes a win-win. You pay less at year end and you accountant has no stress when they have to lodge your tax return.
If you can relate to any these then it is probably time to look at hiring a bookkeeper to take the pressure off in which case get in touch with Cygnet Bookkeeping to discuss how we can help your business grow and to get you back to doing what you love.
Cygnet Bookkeeping 