Looking for a bookkeeper?
Bookkeepers are the backbone of any business. They keep your books in order, make sure you’re paying the right amount of tax and help you manage your cash flow. But how do you know who to hire? Here are some attributes to look out for when hiring a bookkeeper.
A bookkeeper’s job is to keep track of a company’s finances and ensure that they are up-to-date. It can be easy for small business owners to get caught up in their day-to-day duties, which can make it difficult or time consuming to take care of the financial side as well. However, this is an important aspect of running any type of business. Therefore, it is worth taking some time out from your busy schedule to find someone who will help you manage your books so that you have more free time for other aspects of your work life.
First of all, what is bookkeeping?
Bookkeeping is when a person records the financial transactions of a business. It includes preparing source documents for all the transactions, operations, and other events that happen in a business. Transactions include purchases, sales, receipts, payments, payroll and taxes.
Why bookkeeping is needed
If you want to operate a successful business, take care of your finances. There are many reasons why you need an accurate and organised accounting system set up to suit your business needs.
Keep track of customers’ outstanding invoices
This may sound obvious, but you have to invoice your clients before they can pay. We’ve seen businesses who realised their mistake after 12 months and were not able to get any of their invoices paid because they had no record of having sent them in the first place.
It sounds so simple: send out an invoice when work is done and make sure it goes to your client instead of just into the “invoicing” folder on your computer or worse yet never even getting around to sending one at all! But for some reason we keep seeing those unfortunate business owners who realised (sometimes more than twelve months!) that this happened.
“I can’t believe I forgot to invoice my client last year,” an electrician said with disbelief. “I’ve been so occupied with my daily jobs that it slipped my mind.” It was a $3500 Tax Invoice. He was too busy quoting and servicing clients and then moving on to the next. He always thought electrical work, not invoicing, was his hardest job.
His business would have some more revenue and extra money in his pocket.
Another example, a commercial property investor doing their own bookkeeping who missed out on invoicing their tennant for the month of rental.
We’ve also seen businesses invoiced their clients and never track or follow up and have never been paid. Some businesses send invoices without Terms of payment or payment methods including banking details.
Keep track of bills you need to pay
As a business owner, one way to remain in control of your business is to keep track of all money coming in and out of your company.
Ensure bills are paid when they are due to avoid late fees or breach of the Supplier’s Terms and Conditions.
Ensure all the data on the bills are correct before payment. And that bills are not double paid.
Meet related payroll and tax obligations
These can be complex issues, so you may wish to speak to a registered BAS agent.
Business operations get complicated once paying employees. Understanding your responsibility as an employer is important before hiring someone. These are some legal obligations you need to meet:
Employment Agreement (Employment Award)
Tax and Superannuation
Workers’ compensation insurance
Employment record keeping and reporting
Manage cash flow
The difference between those who succeed and fail in business is often just a matter of cash flow. This means the ability to continually maintain an adequate supply of money coming into your company, while still paying off debts as they come due.
That’s why it is vital to have accurate and timely records in the accounting system. These tools allow us to produce financial reports that tell a story about how well or poorly the business is running.
The thing with having cash in the bank account is that it doesn’t always mean your business is profitable just because you’re sitting on some extra dough at this point in time. For example, you haven’t lodged your BAS and made payment. You might have super that due monthly or quarterly.
All business payment obligations should be set aside and NOT be spent on anything else.
And if you’re tight on cash, your financial reports could tell you where the money is going out or why the money is not coming in, for instance, you’ve a large balance in Accounts Receivable. It means customers are not paying you.
Hiring a bookkeeper for a small business
So we’ve discussed why we need to have bookkeeping above, but obviously there’s a lot more involved in looking after the financial aspects of the business.
This is a specialised area.
So you may ask “Do I need a bookkeeper for my small business?”. If your business can support a professional bookkeeper to be part of your team, then you should consider all the benefits and advice they can bring to you.
What qualities does a good bookkeeper need?
Just like selecting a member for your sports team, you would consider their qualifications, experience and equally important how they fit into your team in terms of personality.
In Australia, business owners and employee bookkeepers can prepare and lodge BAS without having the bookkeeping qualifications and experience. This would not be an ideal situation as it can be costly for your business.
Seek a certified bookkeeper that fits your needs. For a freelance bookkeeper to charge a fee for BAS and GST services they must be a registered BAS agent. What this means is they have the right qualifications and experience and have professional indemnity insurance for their services.
The bookkeeping industry is constantly changing at a rapid rate. Not only do savvy bookkeepers stay on top of regulatory changes, they need to be proficient in the use of all sorts of software, like spreadsheets, accounting systems and databases.
Skilled bookkeepers can leverage technology combined with efficiency measures to provide a high quality service for the clients.
You’ll want someone who can mesh well with everyone involved. They need to be a good communicator as they are expected to keep you up to date on your business finances. You want someone who acts in the best interest of your company. Someone that alerts, informs and or advice you on areas that needed to be addressed.
Their strengths need to be: genuinely love working with numbers and being in compliance. Apart from the main role of managing daily financial transactions, savvy bookkeepers offer services with higher levels of management including advice on compliance, establishing systems for checks and balances and advice on improving business performance.
If you want to own your business without being buried under a pile of paperwork, then it’s time for you to find a competent bookkeeper. They can help make sure that everything is done on-time and in the right way – they are worth their weight in gold!
You want someone with experience, knowledge and skills that match what your company needs. Make sure they have Certified Bookkeeping Professional status. You also need someone who is reliable and trustworthy – it’s important that they can be trusted with confidential information about your finances! And finally, find someone who will work well with others on your team so they’ll fit into the culture at your business.
When was the last time you had someone go over your books?
Let us take care of your accounting so that you can focus more of your energy on growing your small business. We have plenty of experience with both startups and established businesses alike, so don’t hesitate to give onbookkeeping a call to discuss how we can help you.