Bookkeeping is essential to any business. When done right, bookkeeping lets you set a budget for your business and prepare for tax fees. Additionally, it helps you keep your finances organised, allowing you to make decisions that could further expand your business. Are you doing bookkeeping by yourself or do you outsource bookkeeping to a trusted service provider?
Bookkeeping doesn’t always come easy for some small business owners. Many don’t have time to keep their books up-to-date. Some entrepreneurs would rather focus on other aspects of their businesses. Others find bookkeeping complicated.
Common Bookkeeping Problems of Small Business Owners
We’ve worked with many sole traders and small business owners, and when it comes to bookkeeping, many struggle with the same things. Here are some common bookkeeping problems that can be solved when you outsource bookkeeping.
Inaccurate Financial Data
Everything starts with your financial data. If your financial information were inaccurate, your data interpretation would also be incorrect.
Suppose you don’t catch the mistake quickly. It could create a snowball effect and cause significant issues to your business operations and finances.
Make sure your books and other accounting documents are clear and accurate. Be precise when logging your income, expenses, and miscellaneous costs. It’s also a good idea to have a regular schedule for logging in your financial information in your books. Set a day and time when you could sit down and focus on your books. Put it on your calendar so you don’t forget.
Misinterpretation of Financial Data
Data interpretation may not always be a straightforward process. This is especially true if you’re using a complicated bookkeeping and accounting system.
Not confident with your bookkeeping or accounting skills? Working with an experienced bookkeeper or accountant would be the best option. Doing so lets you fully understand what your numbers mean and get a full picture of your business’s financial situation.
Mixing Personal and Business Finances
This is a common problem among sole traders and small business owners. Whether it’s unintentional or not, mixing your personal and business finances is a habit you should break.
Avoid using your business account for personal finances and vice versa. When you do this, it’ll be challenging to track your business’ cash flow and profit.
Not Tracking Finances Monthly
Some entrepreneurs prefer to work on their books quarterly or even semi-annually. The problem with this is that you may not be able to track your finances as closely as you should.
For instance, you may not catch a dip in your income until it has gone down significantly. Another issue is invoices left unpaid, which could affect your reputation with your suppliers. Additionally, it could hurt your cash flow when customers don’t pay their invoices on time.
Using the Wrong Bookkeeping and Accounting Software
You have many options when it comes to bookkeeping and accounting software. It can be quite tempting to choose one with all the bells and whistles. However, your choice should depend on your company’s needs and not on the most popular product on the market.
Do you find yourself always stressed out with bookkeeping or bumping it towards the end of your to-do list? It might be time to outsource bookkeeping of your business.
Why Small Business Owners Should Outsource Bookkeeping
Save Time and Money
For sole traders and small business owners, time is currency. For many, every moment spent on tasks that don’t bring in money is time taken away from growing their business.
Outsourcing your bookkeeping lets you focus on what you do best. It gives you the confidence that while you’re growing your business, your books are in order.
Understand Your Cash Flow and Make Sense of Your Numbers
When you know where and when money is coming in, you’d be able to make sound business decisions and set long-term goals.
Receive Financial Advice from Experts
Understanding your numbers gives you a strong edge to make your business successful. With the help of experts, you could further grow your business and leverage your current financial situation.
Receive expert advice on setting up a budget, pricing your services, or implementing a more effective cash flow system.
Bookkeeping and Accounting Trends
Bookkeeping and accounting trends are leaning towards three significant factors: moving your accounting to the cloud, automation, and data analytics.
When you outsource bookkeeping, you could benefit from all of these without investing in additional hardware and software.
Cloud accounting lets you access your books anytime and anywhere you have Internet connection. Additionally, you can securely give team members access to your books.
Many cloud accounting software update your account real-time. This means that anytime you access your account, you see the latest information about your finances.
Did you know that many cloud accounting software allows you to set automatic processes? For instance, you can automatically send invoices and invoice reminders to your customers. It ensures that you don’t forget any invoice. You could also set up your account to automatically reflect any charges on your business’s credit card. You can forget about doing this manually.
Many service providers use a robust system to help with interpreting your numbers efficiently. With accurate data and interpretation from experts, you could confidently make the best financial decisions for your business.
What to Look for in a Bookkeeping Outsource Service
When you plan to outsource your bookkeeping, take time to choose a service provider that aligns with your business values. It would also help to have a list of things to look for in a bookkeeping service to make sure you’re getting someone you can trust.
Here are some things to look for in bookkeeping outsourcing services:
Experience and Reputation
Choose a service provider that has experience working with businesses like yours or within your industry. This way, you know that they are already familiar with what you do and how to help you with your books.
Don’t forget to check out client feedback or testimonials. If this isn’t available on their website, you could request it from the provider. Another option is to ask around your industry if anyone has already worked with them. Doing this would give you an idea of what to expect when you get their services.
Scope of Services
Before even looking for a service provider, it would help to have clarity on what it is you need help with. What type of financial service support do you require for your business? Once you know your needs and requirements, it’ll be easy to shortlist providers.
Tools and Technology
Don’t be shy to ask about the tools and technology a service provider uses. Are they using cloud accounting, or are they stuck doing things manually? Would they require you to have the same tools they use, and would they help you get familiar with these tools and technology?
You’d want to make sure that you could easily reach your service provider when you need them. Before signing up with any provider, consider assessing how long they reply to your email. Do they answer your call or text message? Can you reach them through their social media accounts?
Outsource Bookkeeping Service By Hay Accounting Group
Hay Accounting Group offers a full range of bookkeeping, payroll, BAS lodgment, business accounting and technology solutions for sole traders and small business owners. We make bookkeeping and accounting simple and easy, so you could focus on building a business you love.
With a dedicated team of experts, Hay Accounting Group ensures accurate and detailed accounting records. We take the stress out of managing your books and help you increase productivity, profit, and cost savings.
Stop worrying about your bookkeeping and accounting. Let Hay Accounting Group handle them for you. To learn more about our services and find out how we can help you, book a FREE chat with us. You can also send an email to [email protected] or call 0404 328 415.