The financial management of your business is a crucial operating function to get right. Sound financial practices help businesses to meet their statutory and tax obligations, and head towards sustainable growth. A bookkeeper is often one of the first key hires a business owner makes, once they’ve decided to operate in a more streamlined and efficient way.
Thinking about outsourcing your bookkeeping?
10 telltale signs you need a bookkeeper
The telltale signs that your business needs a bookkeeper are often lurking in plain sight. Are any of these signs present in your business?
1. No time for your best work
Being the bookkeeper in your own business could be distracting you from the work that you do best, like designing your product or selling your services. If financial data entry and reporting is not your area of interest or expertise, it can quickly become tedious and time consuming, especially if you’re learning as you go.
2. You don’t understand your compliance requirements
Adhering to compliance requirements for your business’ record keeping, tax obligations and reporting can be overwhelming. Legislation changes are not uncommon and can be hard to keep up with. And mistakes with reporting can cost a business hundreds or thousands of dollars in fines.
3. Work-life balance is suffering
Because bookkeeping isn’t your core skill or passion, you may find yourself hunched over your computer on the weekend once your other work is done. It’s not an uncommon story for business owners to miss out on family time or socialising with friends because they’re catching up with the books instead.
4. You’re not chasing payments
Chasing payments from overdue customers can chew up a large part of the day—and business owners tend to avoid it because they fear muddying their client relationship by asking to be paid. The result is a cash flow gap which leaves little left over to cover your own expenses. The domino effect of late payments on businesses can be catastrophic to cash flow.
5. You’re not up-to-date with accounting technology
Business owners prioritise staying abreast of industry-specific systems that can work for them (CRMs, logistics software etc), and miss out on learning about new accounting technologies that can transform how their business operates.
6. You’re mixing personal and business finances
Sole traders can get in the habit of mixing personal and business finances, but come tax time, extrapolating the two can get very messy. If you find yourself dipping into personal finances to cover operational costs, it’s a sign that you’re not clear about how the money is being tracked in and out of your business.
7. You’re not keeping up with lodgements
If your business is growing, it’s likely that the number of transactions you are processing each day is growing, too. It’s hard to lodge your Business Activity Statements (BAS) and tax documents on time when you haven’t kept on top of all the daily business transactions. Late lodgements can cost your business thousands of dollars in fines.
8. You’re paying your accountant to do the bookkeeping
A qualified accountant will usually charge higher fees than a bookkeeper, so if your accountant is doing bookkeeping tasks for you, you could be spending more than you need to.
9. You don’t look professional
Your customers form an opinion of your professionalism from every touch point with your business. This includes your invoices, statements, payment reminders and collection calls. If you’re not able to maintain a professional standard with your customer-facing bookkeeping functions, it can reflect badly on your entire business.
10. You need small business advice
With so many moving parts in a business, ideally, you would have a team of advisors to help you with business insurance, business banking, technology and tools, legislation and more. Most small businesses can’t afford the dream team, so it’s a good idea to find a finance professional who has extensive experience deploying business management solutions. Bookkeepers often fit that key advisory role in small businesses.