As a small business owner or director you’ll want to ensure that your business financial accounts are being well looked after, whether you’re using in-house resources or outsourcing to a bookkeeper to take care of your operational finances.
If you decide that your business needs help with bookkeeping it can sometimes be difficult to determine which tasks should be completed by the business and which tasks to outsource to a professional. Our guide below provides some insight into what you should consider when it comes to identifying which tasks to outsource and what you’re able to handle in-house.
A bookkeeping professional can also help to organise and train your staff to ensure they keep on top of the day-to-day accounting needs of your business. Bookkeeping practices can often provide support for training, software subscriptions and advice on best practice and regulatory compliance. Some bookkeeping practices also provide certified software support and some offer tailored software solutions.
When should a business consider outsourcing?
Small businesses often do a lot of their own bookkeeping at the beginning. As they grow, they offload more and more jobs to professionals. We will look at how you can find a balance.
The following are signs that it may be the right time to consider outsourcing your bookkeeping and payroll…
If your business is:
- Struggling to keep up with your monthly or quarterly accounting responsibilities
- Experiencing difficulties with cash flow
- Not submitting complete VAT returns on time
- Unable to pay suppliers or staff on time
- Having trouble getting your sales invoices paid on time
How to handle bookkeeping in your small business
You may want to do some bookkeeping jobs yourself and get an expert to help with others. Perhaps you’re still feeling your way with double-entry bookkeeping, or you’re afraid of getting payroll wrong, or you’re not cut out for chasing invoices. You can outsource any or all of those things.
We’ll look at how businesses commonly break up bookkeeping jobs between themselves and professionals.
Common DIY bookkeeping tasks
Many small businesses look after their own:
Nowadays, software can pull transaction data from banks and read photographs of receipts, so this has become a much smaller job.
Most business owners take on bank reconciliation. While still not necessarily a favourite job, apps that allow you to do it on your phone have sped things up.
Preparing and sending invoices is straightforward if you have good templates and processes. You can always get professionals to help to chase overdue invoices.
If a business has just a few suppliers and cash in the bank, paying the bills is simple enough. But professionals can really help if cash flow starts to become an issue.
Outsourced bookkeeping tasks
Even business owners who are comfortable with numbers will get outside help with:
Bookkeepers can check your ledger for mistyped or misplaced entries, and generally make sure your books are reconciled.
Profit and loss reports, balance sheets and the like determine your taxes and inform big decisions. You don’t want to make mistakes here.
Simple returns may be easy enough for a business owner to prepare but it’s good to use a professional if there’s any complexity. They may also find ways to lower your tax bill.
Payroll gets hard fast, so it’s a good idea to involve an expert at some point and perhaps outsource it altogether if staff numbers grow or your payroll is complex.
A bookkeeper can interpret financial reports for you, and tell you what they mean for your business. They can help you troubleshoot problems as well as plan for the future.
Hiring a bookkeeping service
Bookkeepers often allow you to choose from different service levels depending on your budget. That means you can start out with basic bookkeeping at a modest cost and add on more advanced services as your business grows.
What does software do?
For most small businesses, the choice between DIY and outsourcing comes down to time versus money: Which can you afford to give up? Software lessens the blow on both sides. It automates or streamlines time-intensive tasks like data entry, bank reconciliation, invoicing and some tax prep jobs. That cuts back labour which either saves you time, or lowers the fees that you pay to professionals.