10 Things Your Bookkeeper Should Do for You
1 – Give You Back Your Precious Time
Do you really want to be spending your evenings and weekends doing your bookkeeping even if you know what you’re doing and unfortunately, a lot of business owners don’t! You probably think that it is best to do everything yourself to keep your costs down but it is best to leave important jobs like your bookkeeping to an expert; the outlay can easily be saved in the long run. A good bookkeeper will save you time; valuable time that can be better spent by you growing your business. Do you really want to be spending your evenings and weekends doing your bookkeeping even if you know what you’re doing and unfortunately, a lot of business owners don’t!
When you start out in business it is easy to get caught up with everything that needs to be done, cleaning your office or workplace, making the tea, organising your staff (if you have any), ordering stationery, buying stamps, collecting work, buying tools and materials, going to the bank and oh yes keeping up to date with your paperwork and updating your books!! Although it saves you money initially, all these things actually stop you from doing what you started out in business in the first place to do and make money.
2 – Save You Money
If you have been keeping your own records and preparing your books or even if you fall into the trap of putting all your receipts and paperwork into a shoe box or carrier bags for your accountant at the end of the year, then, a bookkeeper can definitely save you money. An accountant’s fees or hourly rates will in most cases be a lot higher than a bookkeeper’s so your bookkeeper could actually save you money in accountant’s fees by preparing the books for your accountant to check so he or she won’t have to do all the legwork. There are also other areas where your bookkeeper could save you money these will be touched on later.
3 – Keep You Up to Date
As the emphasise is moving more towards ‘cloud accounting’ it is now possible to view your accounting position in real time so your bookkeeping should be done for you at least quarterly. Ideally if your bookkeeping is completed weekly you will always be up to date and know exactly where you stand, how much you have in the bank, what transactions are still to go through, how much you owe and to who and also how much you’re owed and by who.
4 – Prepare Regular Financial Reports for You
If your bookkeeping is prepared for you weekly then at the end of each month your bookkeeper should provide you with some basic monthly reports which at the very least should include a profit & loss, a balance sheet, an aged debtors and an aged creditors list.
5 – Give You Detailed Management Accounts
A bookkeeper worth his salt should also produce detailed management accounts; these are an extension to the regular monthly reports and provide drilled down information. For example, if you sell products you may need to know your best sellers or which products are the most profitable. You might also like to compare your figures from previous months or years so a report showing you a whole year month by month will be of real value.
These reports are key to helping you make informed financial decisions for your business and they will also show you what your ‘breakeven’ figure is which is basically how much you need to make to cover your overheads.
6 – Explain to You What It All Means
Each month or at the very least every 3 months you should have a review meeting with your bookkeeper to go through your figures; during this meeting your figures will be explained to you. It is also an opportunity for you to ask questions and receive sound financial advice without having to wait until the end of the year. If you need
7 – File Your Returns Returns On Time
It is essential that your VAT, PAYE, Corporation Tax, Self-Assessment and Annual Accounts are filed on time and these days HMRC are fining very heavily when you are late. If your bookkeeping is kept up to date, then there should be no reason for your returns to be filed late. Your bookkeeper should produce your VAT return and make you aware of when it should be filed by and how much you are due to pay and by when.
8 – Liaise with Your Accountants
At the end of your financial year, your accountant will need to prepare your annual accounts and calculate your Corporation tax payments using the bookkeeping that has been compiled by your bookkeeper. Your accountant will in most cases, need to ask questions or get clarification on certain transactions so your bookkeeper should be available to answer those questions.
9 – Deal with HMRC On Your Behalf
Every now and then you may receive correspondence from HMRC and have a need to communicate with them. Your bookkeeper should be available to liaise with HMRC on your behalf and assist you if there is an inspection. Again, as your bookkeeper has prepared your accounts he or she will be best placed to speak to HMRC as they will have first-hand experience of the records.
10 – Assist with Your Cash Flow
You have probably heard the expression ‘Cash is King’ well the truth is that so many businesses fail due to lack of cash despite being owed a lot of money. A decent cash-flow forecast should be part of your management reports that you receive but if it isn’t your bookkeeper should at the very least, keep you abreast of where you stand.
If you would like further advice about any of the above 10 points then please do not hesitate to contact us either by calling us on 020 3633 1340, emailing or via our website www.cainandbeer.com