Bookkeeping can be a tedious and time-consuming part of business – so why not outsource it?
Here are five reasons why outsourcing your bookkeeping makes sense.
Keeping your own books is a massive drain on time. You’re helping customers, dealing with suppliers, managing staff… and then trying to fit in the record keeping as well!
If you don’t employ a bookkeeper internally, you’ll be grappling with balance sheets, processing transactions and reconciling accounts. Without proper training in bookkeeping, time will just disappear.
Setting aside hours to pore over the books reduces your flexibility to deal with the other crucial areas of your business.
A busy week or month can leave you struggling to find the time to keep your records up to scratch, particularly if you’re part of a small team.
Outsourcing, or employing a bookkeeper, will get your time back.
You might be wondering if employing your own bookkeeper is the solution, but taking on a new member of staff can be an expensive way to solve the problem.
On top of their wages, basic entitlements, employment rights, pension contributions, and employer’s National Insurance, you’ll also have to fund their professional training.
It is important for the bookkeeper to stay up-to-date with any potential changes in the law.
By outsourcing your bookkeeping, you’ll cut the significant extra costs and commitments of employing a full-time member of staff.
Since you’ll most likely be outsourcing to a firm, you’ll also have a bookkeeper available whenever you need them, with no worries about absence or holidays.
Keeping accurate records of invoices, transactions and receipts is crucial for the smooth operation of your business. This will allow for accurate accounts, as required by HMRC.
Outsourcing bookkeeping to a chartered accountants’ practice means there is an extra layer of checks to ensure the accuracy of your records.
Bookkeepers can call upon the advice and expertise of their team members, and offer an impartial opinion on the performance of your business.
Accurate books will also speed up the preparation of your accounts and tax returns. This will keep your costs down. The money you save can be spent on professional advice to help grow the business.
The roles of a bookkeeper and an accountant can often overlap. This article covers the main differences between a bookkeeper and an accountant.
If your records are found to be inadequate, HMRC can charge up to £3,000 per financial year as a penalty, plus additional tax-based penalties if errors in returns arise as a result.
Bad bookkeeping can lead to under-claiming and over-claiming on VAT, over-inflated profits and many more basic accounting errors.
HMRC encounter these inaccuracies all the time and they’re more than willing to open investigations. Poor records invariably mean higher penalties.
If the records are inaccurate, you may well pay too much in tax!
An external bookkeeper will guarantee a reliable, timely and accurate service.
Applying for Loans
Providing accurate financial data is an essential part of getting a loan.
This will allow for easier cashflow projection, which a bank will request as part of your application.
Banks and potential investors will closely examine your forecast when making decisions. It’s in your interest for financial reports and profit projections to be as detailed as possible – and good records will ensure this.
Your Accountant Can Help
An accountant should be able to help you with your bookkeeping needs.
Appleby Mall offers an affordable bookkeeping service with fixed fees.
Our bookkeepers have a keen eye for detail and we stay in touch with any changes in the law.
We take a forward-thinking approach to managing your books, using the latest cloud-based software. It’s accessible at any time, better for the environment, and more secure.
If you would like more advice on bookkeeping, just get in touch.