Posted on: 17/02/2022 by: Kyle Phillips in: Accounting, SMEs, Startups
The bookkeeper can play a vital role if incorporated into a small business. Hiring a bookkeeper can help your finances make more sense and can help free up time for other tasks that might need doing, usually when starting a small business the bookkeeping responsibilities would fall on yourself. Today I am going to be discussing how hiring a bookkeeper can really help small businesses in the long run.
More often than not accounting and bookkeeping gets mixed up with each other, but bookkeeping is a smaller role than the accountant’s but just as important. Some of the bookkeeper’s roles would include reporting and recording financial information, and the accountant’s work is primarily using data as a tool to establish a business’ financial position in the industry, and to also make decisions on how said finances are looked after and managed.
What does a Bookkeeper do?
A bookkeeper’s main role is to manage your everyday business finances but they also tend to; making sure you pay the right amount of tax, chasing up payments from customers or cliental, making bill payments, claiming back tax, e.g. expenses, and also managing the payroll to ensure payment to employees and HMRC (Her Majesty’s Revenue and Customs) are made on time and correctly.
A bookkeeper will use three types of financial records in order to track the in and out payments that the business makes. There can be more books used but the minimum amount of records kept is three. Keeping the books accurate is crucial for how your business reports its finances and it is essential if you get faced with an audit.
The three records mentioned include; a cash book which records cash flow, a purchase invoice which is to record what has been purchased and how it was paid for, and a sales invoice which is used to record what has been sold and also manages unpaid and paid invoices made to the company.
How could hiring a Bookkeeper help my business?
Hiring a bookkeeper can be helpful in many ways. Firstly, it allows you to free up time to focus and pad out your business strategy. As any business owner who has managed their books themselves would know, having to record every transaction, even the tiniest ones can get overwhelming and destructive to other parts of your business. Furthermore, having a second set of eyes on your cash flow can help ensure that your business doesn’t suddenly run out of money within a blink of an eye. An accountant in some scenarios may not even be needed as they primarily focus on preparing and filling out statutory returns, advising information on the legal entity structure, and giving business and financial advice.
But on the other hand, a bookkeeper is someone who is trained in taking care of the day-to-day accounting, and an expert in organising and keeping record of all transactions that a business makes. It can prove more cost effective and efficient to just have a bookkeeper working for you. Instead of having both a bookkeeper and accountant, as with some business scenarios an accountant isn't warranted. Of course hiring an accountant is important with businesses needing to take care of the tax computation and monthly reconciliation, But you might want to weigh up what the financial side of your business actually needs and then decide who to hire.
Help is available
Running a small business doesn’t have to be as hard as it can be at times. There are plenty of well-trained people out there to give a helping hand. “O Bookkeeper, Bookkeeper, where art thou Bookkeeper?” Well, lucky for you, Business Butler has got some excellent Bookkeeping experts to choose from.
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