Why You Need a Bookkeeping Service

by Simon Adams | Oct 9, 2018 | Business

Business owners often think they don’t need Bookkeeping services.

According to Martin Campbell, managing director of Ormsby Street, 40% of businesses don’t make it to five years. Why? Well, the answer is often found in a company’s books.

You might see bookkeeping as an administrative task with no value added to the business. To some extent you are right. After all, it is tracking and recording money coming in and out of the business, which is then often only used for annual tax returns.

However, bookkeeping can be so much more. Consider its use as the basis for financial analysis. A bookkeeping service can support a business through planning and decision making, which then results in business growth for the future.

What does Bookkeeping involve?

Annual tax returns – You pay tax on business profits. It is important to understand the expenses and earnings incurred through daily running.
Cash Flow – Monitoring cash flow allows for better planning and peace of mind.
Financial Reporting – This can include Income statement (Profit and Loss) and Statement of Financial Position (Balance Sheet).
General record keeping – Maintaining records is important for audit purposes, future business planning and required by the HMRC.

Regardless of the size of your business, keeping track of your finances can be tricky at the best of times. Rather than admin, spend your time meeting customers, marketing your products and services or training staff. This is why outsourcing is the perfect solution.

Let’s shed some light on why outsourcing your bookkeeping service could change your day-to-day working. Not to mention, get you on top of your finances, improve profits and help you to make better business decisions.

Free-Up Your Time & Improve Accuracy

By law, it is critical your accounts are up-to-date and accurate.

Through expertise and precision, a bookkeeper will ensure the accuracy of your accounts. They’re role guarantees all receipts and invoices are accounted for by adding them to the business system. This gives you, and your accountant, a real-time record of expenditure on a daily basis.

Improve Organisation & Allow Easier Access

Organisation is a direct result of having everything recorded accurately and timely. No more stacks of paper or mislaid receipts, because your bookkeeper will have all your financial data at their fingertips.

This also means having easier and quicker access to your accounts. Once your bookkeeper has everything recorded, using suitable software, you’ll be able to find specific transactions in no time.

Reduce Admin with Software Integration

As with everything, there are multiple bookkeeping programs available online. This is yet another task to add to the list of decisions to make, things to pay for and time needed.

Let the experts take the reign. Bookkeepers know their stuff when it comes to the most efficient software for the job. This automatically minimises your admin workload.

Take Xero for example. This software allows Bookkeepers to collate all your records digitally in one place. Which gives you the ability to access them in real time from anywhere with internet access. Not to mention, this software can reduce human error. Through electronic organisation your data will be clear, allowing your bookkeeper to create required reports in a matter of minutes.

Online bookkeeping software helps make collaboration effortless. They are efficient, easy to use and secure.

Better Monitored & Improved Cash Flow

Cash flow is key for any business to last. A good bookkeeping service will monitor your cash flow and meticulously record all transactions. This will allow you, as a business, to make strategic decisions with all the required information.

By keeping up to date with records, you’ll find it a much easier to follow money going in and out of your accounts.

A bank statement often neglects to represent your real-time financial situation. Bills, direct debits and standing orders that are due to leave your account at a later date are not included in your final balance. As a result you’ll find a false sense of security and financial stability.

Therefore, by using a good bookkeeper, you’ll find clarity in your accounts. Your financial reports will show the true amount, including all expenses in and out of your accounts. Expensive surprises should be a thing of the past.

More Informed Planning & Decision Making

Finally, as a result of having full visibility of your accounts, you can make informed business decisions based on your available finances. This includes making plans for the future of your businesses in areas such as:

capital investments
expansion
new product releases

If necessary, this visibility can also be used to present to banks or investors.

You’ll be able to see what your highest expenditures are, which will indicate where you can afford to inject extra cash. This could be to expand your business or increase efficiency.

This blog should give you a better insight into why bookkeeping can be more than an administrative burden. The wide range of bookkeeping is why outsourcing your bookkeeping services could be of great benefit to your business.