Here are 7 signs that now is the right time to hire a bookkeeper.
1. You’re busy. It’s taking up too much time in your day. It feels like a chore.
If your business is growing and you find yourself spending more and more time processing invoices and it’s taking your time away from productive business activities, then it’s time to hire a bookkeeper. As a business owner, your time is much more valuable if it is spent sourcing new business or helping your existing clients.
If you’re already feeling overworked and tired and don’t want to be doing the books at the end of the day, this is a great sign that this is not the best use of your time. This might sound crazy but bookkeepers love reconciling bank accounts and looking at financial reports. So why not focus on the work you are passionate about.
You also want to make sure you take time out for yourself and your loved ones. As a business owner, it’s important to stay healthy and have a break. You don’t want to burn out doing something you don’t enjoy doing in the first place.
2. Your bookkeeping is never up to date. You frequently lodge your BAS late and miss invoice payments.
Once you have started your business, it’s crucial that you monitor your progress on a monthly or at least quarterly basis. If your bookkeeping is not up to date, you are missing vital information that is needed to run a successful business.
Late BAS and super payments lead to increased fines and penalties and costs to the business. If you have outstanding ATO debt, this can place you at a disadvantage if you are applying for grant or loan funding. A bookkeeper can make sure you are on top of your financial obligations. You don’t want your credit rating impacted by late payments that could have been avoided.
If you’ve just started out and are doing it on your own, you may not be aware of all your lodgement and compliance obligations. Bookkeepers are required to undertake training and meet continuing education requirements each year, so we know your obligations and can make sure they are lodged on time.
3. Cash flow is unpredictable.
Cash is so important to any business but especially when trying to grow your business. In the early stages, a cash-flow statement should be prepared monthly and sometimes weekly. If you are going to have a cash shortage you need to know in advance before it is too late. This will give you time to source additional funding or avoid the deficit.
If you have increased sales coming in but no increase in profits or cash at bank, you need to know where the money is going. If your bookkeeping is behind, it is impossible to know where the money went. A bookkeeper and a good accounting program like Xero can provide reports like profit and loss and cash flow statements to show you how your money has been spent. These reports can also make sure your expenses are in line with your budget or see where to make corrections.
If you are busy you may not realise that client payments are overdue. A bookkeeper can help stay on top of invoicing and reminders to make sure payments are up to date. They can also help you find unnecessary spending to keep costs down.
A bookkeeper can also help you budget for your quarterly GST and BAS lodgement and make sure you have enough funds set aside to pay the ATO.
4. You’re not sure how to make sense of a profit and loss statement or balance sheet.
If you don’t have a background in finance, understanding profit and loss statements, balance sheets, accounts payable and receivable, GST, etc. can be a bit overwhelming. You may have trouble knowing what numbers you need to be reviewing each month. A bookkeeper can help you understand the numbers and put them in an easy to understand format.
They can also give you a different perspective on how the business is operating and be a sounding board for ideas you may have about running your business.
5. You’re missing out on Grant and Investment Funding when it becomes available.
Government and grant funding has frequently become available over the last 18 months. Many of these payments require your books and tax lodgements to be up to date. A business is much more likely to get quick access to funding if the books are up to date and accurate. If you’re seeking investment funding, it’s especially important that you have accurate figures to present to investors and take advantage of opportunities that come up.
6. Your accounting fees are higher than you’d like. Your accountant complains that there were a lot of mistakes in your accounting file this year.
If you haven’t been preparing financial statements and reconciling your accounts during the year, your accountant has to do a lot more work when it comes to tax time. Accountants charge a lot more than bookkeepers, so hiring a bookkeeper can reduce costs in the long run.
A bookkeeper can provide your accountant with all the information they need at the end of the year so you don’t have to worry about it.
7. You are worried that your bookkeeping is not accurate or that you’re not doing things correctly.
Doing the books yourself might seem like a cheaper option, especially when you are just starting out. However, if it’s not done correctly it can actually end up costing you more in the long run. A professional bookkeeper can end up saving you money and add value to your business.
You don’t want to be laying awake at night worried about whether your BAS is right or whether you have missed a payment or entered something correctly. A bookkeeper will give you peace of mind so you can sleep at night.
Ready to hire a bookkeeper?
If any of these signs relate to you, it’s probably time to hire a bookkeeper. Ultimately your time as a business owner is better spent focusing on your core business needs and doing what you are passionate about. The decision to bring in an outside expert is part of running a successful business.
If you are ready to take the next step and hire a bookkeeper to help your business, please get in touch. We offer a free consultation and can give you a quote that is customised to the needs of your business.
If you need a Xero Bookkeeper who has over 20 years experience we would love to talk to you and find out more about your business.