How A Bookkeeper Can Improve Your Business
Written by: Canny Accounting
Bookkeepers are a little bit like unicorns… magical and amazing creatures that can help you and your business make strategic and accurate decisions in real time because they work their magic on your financial reporting. When you find one, and you find a good one it will feel like you have hit the jackpot! Long gone are the days when someone would turn around and ask ‘Why do you have a bookkeeper? It’s just data entry!?’ While that might be a thing of the past, what’s not, is the fact that bookkeeping services for your business can be an invaluable asset for helping your business thrive in the long run.
Bookkeeping is an important part of any business. In a nutshell, it allows a business to maintain financial records, meet tax and legal obligations, and also provide business owners with information regarding the state of their own business. Bookkeeping helps your business run smoothly and is a vital job in any business and this is true whether you do the bookkeeping yourself or if you hire someone to do it for you.
Without proper and correct bookkeeping, your accounts and your books will not be accurate which means that your accountant won’t be able to get a clear picture of your business’s finances. This can leave to not being able to make strategic business decisions which can have a big impact on the business itself.
Just as importantly, your business has a legal obligation to accurately record its accounts as well as file company reports to the Australian Taxation Office (ATO). So it pays to get it right and to get it right from the start.
Bookkeeping and finding good bookkeeping services, like the team at Canny Accounting can help you do all of this – and will also provide you with invaluable insights into your business’s financial health. Bookkeeping can be done in-house by the business owner or an employee, or it can be outsourced to an external bookkeeper or firm.
What is a Bookkeeper?
A bookkeeper is a person whose job is to keep records of the financial affairs of a business.
This can include:
- Processing sales, purchases, receipts and payments
- Processing payroll
- Bank reconciliation
- Providing reporting for the preparation of a Business Activity Statement (BAS)
- Producing reports for both management and accountants
- Record keeping
When a business owner or their partner, spouse or even a friend is running the bookkeeping and financial side of things, they are not always qualified and experienced in that area. Sometimes they are simply thrown into the deep end!
The benefits of a business having a professional bookkeeper of their own or engaging in bookkeeping services are huge…
A Bookkeeper Allows You to Focus on Growing Your Business + Your Financial Plan
As a business grows, so does the paperwork and record-keeping! Most business owners reach a point where they realise that they are spending too much time every week and weekend chasing payments, reviewing supplier invoices or processing their payroll.
A bookkeeper or engaging in bookkeeping services allows the business owner to focus on what is important – working, growing and keeping the business running successfully! Having to pay an invoice or reconcile a bank account is not always the best use of a business owner’s time, especially when it can be done by a team like Canny Accounting with the bookkeeping services that they offer in-house!
Better Financial Records for a Better Financial Picture
Many business owners see bookkeeping as a task to be completed after all of the other tasks on their to-do lists. This leads to the financial accounts of the business being ignored until such time that the Business Activity Statement (BAS) is due. By not keeping financial accounts up to date, the business owner is missing out on valuable information that can be used to improve the business.
Having a bookkeeper update the accounts on a regular basis allows the business owner to get a clear snapshot of how the business is performing – at any time! If a business is performing poorly, early intervention can help turn things around. The last thing a business owner wants and needs is information that is three or four months old.
Accurate and timely information can help a business owner make decisions regarding so many aspects of the business; staffing levels, purchasing new assets, adjusting pricing structures, debtors and creditors, repaying debts and cash flow just to name a few.
A Bookkeeper Gives You Peace of Mind + Greater Financial Reporting
A business owner can’t be an expert at everything, it would be nice but the time and practicality of it just doesn’t exist sometimes.
Ensuring the business is complying with the latest tax regulations such as ongoing changes to superannuation law, is one area where a business owner may be out of his depth. This is where engaging a well-qualified bookkeeper will help to stay out of hot water with the Australian Tax Office (ATO) as well as give you peace of mind that all monthly, quarterly and annual deadlines are met for BAS, tax as well as superannuation.
Cost Accounting With A Bookkeeper Saves Time + Money
Poor bookkeeping can lead to increased accounting fees when year-end compliance work is being undertaken. A good bookkeeper is able to ensure that accounts are reconciled, and mistakes are rectified before the financial records are handed over to your accountant.
A good bookkeeper will also keep all relevant documentation for the business such as bank and loan statements, finance contracts, invoices and many more.
Some business owners think that they are saving money by not using the services of a bookkeeper, not realising that they end up paying higher accounting fees as the accountant is having to spend time correcting the business bookkeeping errors.
It’s also important to note that there are some very big differences between a bookkeeper and an accountant, while they work together and complement each other – the roles that they play are very separate. Check out this blog post on The Difference Between A Bookkeeper And An Accountant to make sure that you know who is who in the finance world.
Tax Law, Internal Audit + How A Bookkeeper Can Be Useful With An ATO Audit
Unfortunately, it’s not a matter of if a business will be audited, but when! Knowing that your bookkeeping is being done correctly means that you can sleep at night. It will also reduce (but not entirely eliminate) the possibility of an audit.
This is because a bookkeeper knows to do tasks correctly, complete BASs correctly and therefore not draw attention to blatant and obvious mistakes. When the ATO sees a silly mistake, there is often the temptation for them to dig deeper so it’s best not to poke the bear!
One example of how a bookkeeper can assist if an audit occurs is to ensure all the paperwork has been prepared and saved. This prevents a business owner from scrambling for documents and trying to justify figures based on memory.
The ATO is also increasing its audit focus on superannuation. Not paying the correct amount of superannuation or paying superannuation late can lead to an audit. An experienced bookkeeper can keep on top of your business’s superannuation requirements to ensure that payments are being made on time and of the correct amount. A superannuation audit can be an expensive and time-consuming process with penalties and interest payable.
Want to know more about ATO Audits and how to avoid them? Check out this blog post we put together on How To Not Get Caught Out With An ATO Audit!
Canny Group + Your Bookkeeping and Accounting…
Many small businesses do not use the services of a professional bookkeeper, preferring to perform all the bookkeeping tasks themselves. While this can work well, there are often times when the business owner, spouse or friend can get things wrong.
This can be due to a lack of knowledge about the software, a poor understanding of tax and superannuation laws or simply insufficient time to perform the tasks – bookkeeping is not an easy job, especially when it’s done correctly!
At Canny Group, we offer bookkeeping services to our clients. This includes reconciling bank accounts, allocating transactions, managing payroll and superannuation, and lodging Business Activity Statements among many other services. Some clients use more services than others, and that’s what is great about our offering because it is tailored to you – the client and what you and your business need.
Having your accounting firm manage your bookkeeping can bring many benefits to a business. The bookkeeper can utilise the skill and experience of accountants while it can reduce the amount of communication that needs to occur between the accountant and the bookkeeper. We are the accountants Geelong trust to take care of their bookkeeping and their business.
Get in touch today to find out how we can help your business get back to doing what it does best and let us do what we do best!
