The task of bookkeeping is often underestimated in businesses.
It appears to be a fast and simple job to get transactions entered into an accounting system, especially now with cloud technology like automated bank feeds and receipt/expense capture apps. But as in many cases, the technology doesn’t deliver the service in itself, it just makes it easier.
Someone still has to do the heavy lifting of compiling and recording the transactions accurately and it’s unlikely to be the best use of your time!
Accuracy is paramount!
If the records are not right then this can cause a whole heap of problems that are toilsome and grueling to work through.
From time to time some fail to see how outsourcing can be useful and this can mean they fail to run their business as they should.
In the following points, I am going to discuss some key benefits of outsourcing your bookkeeping.
#1 Time
Bookkeeping is time-consuming. Plain and simple.
It requires a high amount of accuracy and awareness, you need to be awake, you need to be good at spotting the details and you need time to do this!
Many entrepreneurs underestimate the importance and end up leaving the bookkeeping duties until the last minute on a Friday, this then ends up becoming a Saturday morning, afternoon and night job, then a Sunday panic.
“Have I done it correctly? Is everything in order? What am I doing?”
Monday morning dawns and you suddenly no longer want to run the business you were once so passionate about. You’re tired, you have had no time to spend with your family and friends, you have not had time to rest. Why has it been allowed to come to this?
Outsourcing your bookkeeping means that you do not have to work seven days a week, it means that you have time to give yourself a break but there’s no point in a break if you’re still going to stress…The bookkeepers are specialists, they know what they are doing so take a big deep breath and let your mind wander.
#2 Efficiency
Complete organisation, minimum time wastage, and maximum profit is the ideal business position.
Time is money and wasting time means throwing money into the fire pit.
Running a business is not an easy job, it can completely drain you but you keep going because you started the business with a motive and you want to achieve this. Your passion pumps through you to keep you going but then it comes to the point where you suddenly remember the bookkeeping duties you have to do your energy plummets but unfortunately for you, you have to do it.
This is where mistakes can happen and all efforts are pointless. You have to spend time undoing all the knots. Profit suddenly turns into breakeven and the fire has found its source.
Whilst you’re focusing on the core activities of the business, the bookkeeper can be doing the bookkeeping duties at the same time (and also making sure they get it right the first time before anything has been submitted)
A recipe for the ultimate bake; time-saving + money saving = profit maximised.
#3 The law
An accountants job is to make sure that you are paying the right and fair amount of tax whilst also making sure you are abiding by the law. They carry out steps that eventually end up having to be submitted to companies house and HMRC.
The foundations of this are bookkeeping.
If the bookkeeping has been done incorrectly you could end up paying more VAT and Corporation Tax than you need to. In the worst case, you could face fines and penalties.
The bookkeepers will make sure that they spot the inaccuracies in the invoices, they will have the knowledge on how to correct them and will have the expertise to put the correction into place all so that you are left sound with the knowledge your accounts are correct. They will get it right the first time.
What’s Next
If you find yourself losing the passion for your business and forgetting the core reasons why you risked it all and started in the first place, take a step back and look at what you find spending the most of your time and where you’re lacking.
Trying to focus on making your business stand out from the competition by creating a unique selling point, creating a vibe for your business, creating a reputation all whilst also making sure your accounts are correct, your staff are paid on time, making sure your debtors are paying you on time, making sure you pay suppliers so you don’t get cut off, you have found the right amount of tax to state from the invoice against whilst trying to find time to spend with your family and friends, having time to do a hobby, having time to develop a new skill, having time to work on your bucket list of goals and just having time to relax! (You can breathe now).
It’s all a bit messy and creates unnecessary headaches.
One part on that list is no more important than another, it’s just about having the time to do it all.
Everything will always come before bookkeeping as it’s a job most do not want to do, however, even though I have said that no part is more important than another, bookkeeping is the most important accounting function and I cannot express enough how much attention it needs.
If you do not have the time and find yourself being spread too thin… the solution?
Outsource.
If you would like more information on MAP’s outsourced bookkeeping service, you can read more in our Data Collection Brochure.
