You’ve set up your own business, and you’ve decided you’re going to do your own bookkeeping to keep costs down, and keep a handle on your numbers. How hard can it be right?
Well for starters did you set up your business to be a bookkeeper? Actually if you did set up as a bookkeeper, look away now, you’ve got this!
Every business owner we speak to (apart from bookkeepers!) did not set up in business to do the bookkeeping, do the admin, or the marketing.
You set up in business because you have a passion for your area of expertise, and your purpose is to share this passion with the world! This could be running a restaurant, providing creative services, or making awesome things.
You can’t be awesome at your thing, if you’re being pulled into the admin!
So let’s look at some of the reasons why you don’t really want to be doing the bookkeeping:
1. It takes time
It can be a real chore to keep up with the bookkeeping, especially if you’re trying to manage payroll and VAT returns too.
It’s not your area of expertise, so it’s going to take you longer than it would take an experienced or qualified bookkeeper.
This is going to lead to frustration, and potentially rushing the job, and making mistakes.
And if there are mistakes, it’s going to take us longer to produce your VAT return, management reports and accounts, as we’ll need to tidy you up first.
It’s also time you should be spending on your business. Your time is crucial, to work on your plans for your business, if you’re not steering the ship, who is?
Your time is precious, and needs to be spent on things like:
- developing new products and services
- looking after your clients and customers
- finding new clients
- developing your strategy and future plans
- reviewing your key numbers
- checking your pricing
- quality time with your loved ones
- nurturing your team
- looking after your health and wellbeing
- focusing on what it is that you love!
“Time is what we most want, but what we use worst”
2. It takes expertise
As much as we are huge fans of software companies like Xero and Dext, and actively promote them, they do make everything look super easy!
Our bookkeepers have gone through rigorous training and have many years of expertise, and are all at least AAT qualified (Association of Accounting Technicians).
The only bookkeepers we work with will be quietly keeping up with tax and accounting rules and regulations, and making sure that every single transaction they deal with is recorded accurately in your accounts.
VAT rules in themselves are complex, and if we’re not sure what the treatment is, we know where to go to find out the correct answer.
We have systems and checks that we go through as part of our bookkeeping and VAT return process, to make sure that your data is accurate.
Here are some examples of things we check:
- is there a correct VAT invoice?
- is the invoice made out to the correct business name and address?
- is this business able to claim the VAT?
- is it a legitimate business expense?
- is it going to the correct account code in Xero?
- are we claiming tax correctly?
- is there a more efficient way to do this?
We also have a series of month end checks, to ensure that everything balances and agrees, and your data is super reliable!
“You don’t know what you don’t know”
3. It could cost more in the long run if you do it yourself
On average, it costs twice as much to unravel and tidy up data, than it does to manage the data accurately in the first place.
We recently reviewed a client’s data, who is managing their own bookkeeping:
Their bank account had a difference of over £19,000 between their bank statement and Xero.
To find this we reviewed each month end balance on the bank statements to Xero, to zone in on where the errors had occurred.
For each month that we had a difference, we checked every transaction on the bank statement to the transactions in Xero. This gave us 2 lists:
1. entries in Xero not on the bank statements
2. transactions on the bank statements not in Xero
This took a couple of hours for each month, but it can take more or less time, depending on the size of the business.
Once we had identified the problems, we then moved on to fixing them all, and this stage involved going back to the client with lots of questions to get to the bottom of the errors.
Nobody needs this level of aggro. You don’t want us to be fixing errors instead of supporting your business, and you certainly won’t want to waste your hard earned cash paying us for tidy up work!
“We’re so happy you’re managing our bookkeeping.
It feels like someone’s there holding our hand, and our numbers make more sense.
Cashflow is better too!”
4. Reliable data empowers you to make your best decisions!
We understand that it may feel like you’re in control if you’re managing the day to day bookkeeping.
In reality what will give you more control is being able to review accurate and up to date headline figures.
Giving you even more power, is working with us to interpret your numbers, setting plans and actions together to reach your goals.
Imagine being given just the key numbers you need, interpreted with you, to help you to make your best decisions!
You will hold the power to make the right decisions such as:
- when to hire
- when to move to new premises
- how much cash to take out of the business
- whether you need to increase your prices
- where you can reduce your costs
- how much to save for tax
- ways to reduce your tax
- how to reclaim your time
What to do now?
If you’re managing your own bookkeeping, get in touch for a Xero HealthCheck so that we can see how you’re doing, and provide a quote for managing yoru bookkeeping, payroll and VAT returns.
Check out Our Bookkeeping Process to see what’s involved.
If you think you could benefit from Xero and Dext training to get your bookkeeping skills up to standard, and work within our processes, we can also do that.