It may seem strange that an accountant is recommending a bookkeeper; after all we basically do the same job, don’t we? The short answer is no. Bookkeepers and accountants approach and deal with financial information from different perspectives and therefore can offer insights at two different levels.
With the rise in automated solutions for banking, bookkeeping, accounting and just about everything else it is easy for the traditional roles of bookkeeper and accountant to overlap.
However, there are five key reasons why your business needs both a bookkeeper and an accountant:
accurate financial data
Running a successful business is reliant on the owner or manager being able to make important decisions quickly with consideration of all the available information. Whether this is the decision to take on a large project requiring additional equipment and resources or to finance or lease a photocopier, it is imperative that you have up-to-date financial information. Having your transactions entered regularly and accurately can sometimes make the difference between success and bankruptcy.
up-to-date payroll and superannuation
The Australian Taxation Office [ATO] is making it even easier [ or more onerous, depending upon your perspective ] for business owners to report and pay their business’s payroll liabilities. Automatic systems such as ‘Single Touch Payroll’ and Superstream mean it is imperative that wages, Pay As You Go Withholding and Superannuation are reliably accounted for, as these will be immediately reported to the ATO every pay, rather than once a month or quarter. It’s worth getting this right at the start as it can be difficult and time-consuming to make corrections once the data is submitted.
management of payments and receipts
The demands on a business owner seem to be never-ending and ensuring bills are paid on time and BAS are lodged are just some of the many duties you have to keep up with. Having all your bills, invoices and liabilities recorded in an accounting system is a great first step and subsequent automatic alerts and reminders are invaluable. Because your bookkeeper is seeing transactions on a regular basis, they often have greater awareness of what payments need to be made, or what receipts are outstanding over a specific period. They can make sure you don’t miss anything important.
Let’s face it, occasionally it seems as if accountants are speaking a different language. A bookkeeper knows your business’s transactions almost as well as you do and can sometimes provide the operational perspective to your accountant’s more academic observations.
For example, if your accountant queries why your gross profit percentage is only 5% this quarter instead of 20%, your bookkeeper may point out that this is a timing issue – you have a few invoices that were issued late while suppliers were paid on time, however, this should even out over the year. A bookkeeper has knowledge of your day-to-day finances that many other advisors won’t. Working closely with your bookkeeper and accountant allows you to keep on top of any potential problems or opportunities that may otherwise be overlooked.
It seems counter-intuitive because your bookkeeper will inevitably require payment for their services but hiring a bookkeeper can save your business not only money but also time and potentially your sanity!
- Having bills paid and receipts collected in a timely manner can help to even out cash flow and save on late fees and interest.
- Banks, finance providers and suppliers appreciate clients who are in control of their finances and are more likely to look at finance applications favourably.
- Accountants love clients who come to them with accurate, up-to-date data as it allows them to prepare financial statements and tax returns more easily and allows the opportunity to offer more strategic advice and analysis.
- Instead of spending hours every week muddling your way through your books, you can be out drumming up business or doing the work you love.
Some people love bookkeeping and do it well. If it is the highlight of your week, then by all means continue to do your own bookkeeping. At businessDEPOT Accounting we have a premium bookkeeping service and also work closely with a number of local bookkeepers to ensure our clients have access to the data and insights they need to empower the bright ideas.