Many small and medium businesses (SMEs) opt to either attend to their own books, or employ a bookkeeper directly, reckoning that their experience and commitment to the business will reap its own rewards. Often it does reap rewards, but only if they are lucky enough to find a capable bookkeeper or they themselves have a thorough knowledge of accounting software, and indeed come from an accounting background.
Many of the clients that come to us bring with them various horror stories; within the first week of our review we often notice the double payment of creditors, the under-billing of revenue, incorrect GST coding typically resulting in under-claiming GST and the miscalculation of super and PAYG tax of employees and contractors. Sometimes it can take months for a business owner to realize that the books haven’t been done correctly, and the adjustments that will have to be done to reconcile your records are both unnecessary, time consuming and costly.
It can be daunting to ask for outside help. A professional bookkeeper, is one who is familiar with ATO rulings, changing tax laws and business compliance and development, will save you both time and money.
While there are countless ways for a professional onsite bookkeeper to help you save money the seven most important points for the growth and maintenance of your business are as follows:
1. Help you work ‘on’ your business, not ‘in’ your business!
By outsourcing to a professional bookkeeper, whose performance is key to retaining the account, you are better able to focus on the growth of your business. Though you can still monitor the progress of your accounts, the day to day responsibility is removed, and you can continue to build your company confidently knowing you are receiving accurate reports, and your records are meeting statutory obligations.
2. An onsite bookkeeper gains intimate knowledge of your business:
While there are part time bookkeeping services that offer to care for your accounts remotely, that is by you sending records either electronically or physically, we have found it is best to engage someone who has intimate knowledge of the running of the business. Vital to providing meaningful management reports is a through the understanding of your business operations and key performance indicators. Once the business expands it requires a macro approach, accurate reports can only be obtained through that intimate knowledge of business practice and employees, and is best conducted onsite.
3. There a bookkeepers, and then there are “bookkeepers!’
As is the case in many different industries, the skill level between one bookkeeper and the next may be as varied as the apprentice who calls himself a laborer and his boss, whose experience and skill far outweighs his younger counterpart. Both may call themselves laborers, yet their skill levels are worlds apart.
So too is it with bookkeeping. A data entry clerk is not capable of providing the same service as a qualified management accountant. As such one must consider approaching a professional bookkeeping firm, whose experience and familiarity with the accredited accounting software used by your company will ensure a continued quality of service.
4. Opportunity to Implement Efficiencies:
Employing a professional bookkeeper means that should a situation arise where inefficient practice may be removed, the hours or days saved may be allocated to another client. Thus the client saves money, and the bookkeeper is able to use the saved time working on another account.
5. Flexibility and Backup
Employing a part time or full time bookkeeper directly can also spell disaster where leave and Christmas holidays especially are concerned. For work that you may not feel comfortable leaving with other employees when you yourself go on holidays.
When employing a bookkeeper directly, there is never a good time to go on holidays. Wages and bills need to paid and monitored, and there may be certain duties you don’t feel comfortable sharing with other staff. When liaising with a professional bookkeeping firm, should your bookkeeper go on annual leave, or take time off during the Christmas holidays, you can rest assured that another capable and experienced bookkeeper with intimate knowledge of your company and its crucial areas, will be able to attend to your account in the meantime. There is always a person to fill the role no matter the circumstances. Something which a bookkeeper employed directly, working solely for the company as an individual, and lacking the resources of a larger professional firm, cannot guarantee.
6. Save Employment Costs
Many often choose to employ a bookkeeper directly because of the initial costs involved. However when employing a bookkeeper you then must provide and consider superannuation, sick leave, annual leave, worker’s compensation insurance, recruitment and PAYG withholding tax. Comparatively, when outsourcing, though the initial rate may appear higher, these additional costs - which make up to 42% of the base salary - are not applicable.
7. Stricter ATO Regulation for BAS Preparers:
To regulate the preparation of BAS and any related work, the ATO have introduced stricter penalties. Businesses could be facing penalties up to $22,000 for engaging the services of unqualified bookkeepers. To avoid the imposition of penalties, your tax accountant will then have to review any BAS work, adjusting where necessary. You will then have to pay the accountant’s rate on top of your bookkeeping fee. Using a professional accredited bookkeeping firm for all data entry and records removes the need for review, and you will be charged at the bookkeeper rate.
I hope this aids your understanding of how using a professional bookkeeper can not only save you money, but can also improve the exponential growth of your business. We here at Lockwood & Ward Pty have a hands-on professional bookkeeping team which is will assist you with all you bookkeeping needs. For further information, why not give us a quick call on (02) 9299 7044? We’re more than happy to help!