Why outsourcing bookkeeping is great for your small business
If you are a small business owner, there’s never nothing to do. You’re responsible for sales, marketing, admin, recruitment, people management and, of course, finance. You probably didn’t go into business to be weighed down by all these tasks. Bookkeeping is one of the most time-consuming and frustrating tasks for many small business owners. So, what can you do if balancing the books keeps you up at night?
What is bookkeeping?
Bookkeeping is the process of recording and tracking all the income and expenses of a business. Without accurate bookkeeping you’ll find it much hard to understand your business performance. And worse than that, inaccurate records can lead to serious consequences, such as tax penalties, missed opportunities for tax savings, and legal action against your company.
Why is accurate bookkeeping important?
When your financial records are accurate and up to date, you can keep track of your business performance, helping you to make more informed decisions. You can quickly identify if you’re overspending and need to rein in your costs and you can see which areas of your business are profitable and which ones aren’t. You can also be reassured that you’re paying the right tax and won’t be hit with penalties or interest charges.
Consequences of inaccurate bookkeeping
If your bookkeeping is full of errors, you are much more likely to be reporting incorrect numbers to HMRC which could be costly. By overstating your expenses or understating your income, you won’t pay enough tax, and this can lead to penalties and interest charges. Inaccurate bookkeeping can also lead to missed opportunities for tax savings. For example, if you don’t accurately record your expenses, you may miss out on deductions that could lower your tax bill. If your bookkeeping has lots of errors, you’ll end up paying much more to have it fixed by your accountant at year end.
Why consider outsourcing bookkeeping?
Outsourcing your bookkeeping gives you more time to focus on running your business. Here are 5 reasons to consider handing over your bookkeeping to an expert:
- Cost savings – When you outsource your bookkeeping, you’ll only pay for the services you need. You won’t have to worry about NI, sick and holiday pay, and other employee related expenses.
- Expertise – Having a qualified resource to manage your accounting means your financial statements are accurate and up to date.
- Time savings – Bookkeeping can be a time-consuming task, especially if you aren’t sure how to code different types of expenses or you aren’t good at managing your receipts. When you hand it over to an accountant, you can free up your time to focus on running your business.
- Scalability – If your business grows, you can easily increase your bookkeeping services to meet your needs.
- Decision making – Having your records kept accurately and up-to-date means you can access data for decision making much more easily.
How to find the right bookkeeping service provider
If you’re considering outsourcing your bookkeeping, here are some tips to help you find the right service provider:
It may be a good idea to look for a bookkeeper or accountancy practice that specialises in your industry, especially if you work in a niche area where tax rules are more complex such as R&D.
There’s nothing better than a solid recommendation from another business owner whose judgment you trust when it comes to finding the right bookkeeping service for you.
As your business changes you may need to adjust the bookkeeping and accounting services so choose a provider who offers a range of packages and flexible pricing.
- Systems and software
Getting to grips with new software can be daunting so choose a provider with user-friendly systems who’s prepared to give you training.
The service provider should be certified by a reputable accounting organisation, such as the Association of Chartered Certified Accountants (ACCA) or the Institute of Certified Bookkeepers (ICB).
Clear and effective communication between you and the bookkeeping service provider will enable you to focus on your core business and leave them to handle the finances.
Get support in your business by outsourcing your bookkeeping today
Outsourcing your bookkeeping can save you frustration, time, money, and reduce the risk of errors and fraud. If you are looking for ways to free up time in your business, ask us about our small business owner bookkeeping services. Call the team on 01322 250001 for a no-obligation chat about your business needs.