7 Simple Indicators That You Need To Hire A Bookkeeper
Sometimes, we wish that we could just be ‘left alone’ to get on with producing our goods and services. The reality, however, is that the bookkeeping function is central to any business, whether for bank reconciliation, cash flow forecast or a hundred and one other vital business functions. And with the help of accounting software to automate the task, it can be surprisingly easy
If you’re a small business, you probably feel that your office function is a costly add-on to the real purpose of your business – producing goods or services that you can take to market. But if pressed, you acknowledge the vitally important role of your office staff – and particularly those who work in the bookkeeping areas.
But what if your business has yet to hire a fulltime bookkeeper? How will you know when it’s time to make the leap and get someone in place to handle all those everyday functions like bank reconciliation, invoicing, cash flow forecast or chasing cash. These five warning signs will give you a good indication that the time has come.
7 Simple Indicators That You Need To Hire A Bookkeeper
1. You’re caught out by your compliance requirements.
Sometimes, in a rush to get our business started, we overlook the fact that we are legally obliged to keep formal records of our financial activities. And even if we’re broadly familiar with these obligations, the law changes all the time, so what’s okay today may not cut the mustard tomorrow.
And make no mistake about it, the cost of non-compliance can be high, both in fines and in terms of reputational damage. Someone who works fulltime as a bookkeeper will be familiar with these obligations, however, and will spend part of their time each year on continuous professional development which will safeguard your company in terms of fulfilling its obligations.
2. Your cash flow is drying up.
Chasing overdue payments from your customers can be a bit of a pain, and owners or managers often find it to be one of their least favourite work tasks. But if you don’t work to a strict roster of cash chasing, late payments can cost you thousands each year. You may well have to ‘replace’ that overdue cash with a costly overdraft, for example.
Or worse, it can mean that you’re not in a position to pay your suppliers on time, which can make life very difficult in terms of having a great chain of suppliers at all times. Not alone would a fulltime bookkeeper take this task off your plate, but may also automate the task to a greater degree by using simple software to issue reminders and regular statements.
It’s often a good thing to separate the functions of selling and cash collection, so you don’t have to harass a valued client that you’re doing a lot of business with. A professional bookkeeper will not only help ensure that your cash is chased ruthlessly, but can also assist in creating an accurate cash flow forecast which can let you know if there’s trouble brewing in the near future.
3. You’re really struggling to come up with an acceptable form of work-life balance
For a professional bookkeeper, most of the tasks that he or she carries out each day are very simple, and repetition over the years makes them even easier. But if you, as the manager or owner, are trying to do a bookkeeper’s job, chances are that it’s taking you twice or three times as long.
And often, work like bank reconciliation or generating a cash flow forecast gets done in the evening or at weekends, when it won’t interfere with your core work. This can play havoc with your family life or your work-life balance. And while this is sometimes accepted as part of the course in the early days of a business, it will eventually exhaust you and leave you hating the bookkeeping function.
4. You’re looking amateurish to your clients.
Every time you interact with a client, they form an opinion of your professionalism. These touchpoints include simple things like invoicing and issuing of statements. If you send out the same invoice twice, or demand payment for an invoice that’s already paid, you can come across as very amateurish, causing damage to your reputation.
5. Your personal and business finances are becoming blurred.
This is a problem that’s very commonly experienced by the sole trader sector. If your business account is a tad low at any stage, there’s a temptation to buy diesel for your van from your personal account.
Or conversely, if you’re strapped for cash personally, you might pay for the weekly groceries with your business debit card. This can become a nightmare come tax time, or when you’re trying to complete a bank reconciliation, as you’ll have to spend hours and hours extracting your personal expenses from your business expenses.
It also makes it very difficult to keep track of the true cash situation of your business. Are you ‘owed’ money from your personal account, for example? Having a bookkeeper on board will ensure that these bad habits don’t take hold, and that you start as you mean to go on.
6. You have client cheques in your top drawer.
As your business starts to grow, the number of incoming cheques from clients or customers will grow accordingly. If you find that you’re ‘sitting’ on multiple cheques until you find time to go to the bank, then it’s time to start looking at hiring a professional bookkeeper – even on a part-time- basis – to sort these everyday chores on your behalf.
It can potentially make a huge difference to your cashflow, and help you develop more accurate cash flow forecast, which are the lifeblood of any growing business. Remember, too, that getting hold of that cheque was the hard part, so the quicker you bank it the better.
7. You have no idea as to what accounting technology is out there.
No matter what line of business you’re in, there will be a raft of technology software to help you run things more smoothly This can be anything from monitoring your delivery trucks to streamlining your warehouse activities.In similar fashion, modern accounting software like Sage 50c can streamline so many of your day-to-day transactions, including bank reconciliation and cash flow forecast.
If you have no idea what sort of accounts software is out there, then you really do need to consider getting a bookkeeper on board, who will be familiar with the many and varied ways in which accounts technology can help drive your business forward.
