Global Bookkeeping Week has celebrated the bookkeeping profession, the vital work bookkeepers do to support micro and small businesses, how they benefit people, businesses, communities and our economy. As Global Bookkeeping Week draws to a close, we look at why businesses are missing out without a bookkeeper.
Why use a bookkeeper?
Businesses can do their own bookkeeping, why hire one that will cost the business money?
Bookkeepers provide a vital service – ensuring compliance, often saving the business money and saving the business time to concentrate on running the business.
They save you time by handling all the daily financial work for you and allowing you to concentrate on running the business. The real-time information they collect can help them offer you new insight into your business.
A bookkeeper is highly valuable to a business, providing more services than just financial recording and compliance. Bookkeepers often specialise in a particular industry and have experience in industries allowing invaluable support and guidance to the business.
The fee spent on a bookkeeper is often made back through savings achieved through experience and tried and tested processes as well as allowing the business valuable time to run and grow.
We think of ourselves as more than bookkeepers, we become an integral part of the business, understanding the business and having a good relationship with the business owner and employees allows an in depth understanding of the business.
We provide as many or few services as the business needs, not what we believe the business should have which other bookkeepers often do. This keeps costs down.
Through our business networking we have relationships with numerous businesses that provide support and guidance outside the finance world at a great price.
Peace Of Mind
It may be surprising to know that bookkeepers do not have to be qualified! We can’t believe this, how could an unqualified bookkeeper know the correct legislations!
As part of the Institute of Certified Bookkeepers, our practice licence is dependant on us having the relevant qualifications and insurance in place, they provide ongoing support to members to ensure they are knowledgeable and up to date with the latest legislation, mindful of their ethical obligations, and best-placed to provide a trusted and exemplary service to business.
When Should A Business Engage A Bookkeeper?
As soon as possible! Even if you are only thinking about setting up a business, we provide an hour FREE consultation to guide start ups. Otherwise you could end up not registering with the correct agencies and back log of work which will take time to process and will likely be difficult because the invoices and expenses were from some time ago, it is easy to forget what it was for.
What Happens Without A Bookkeeper
Person A registered their business as a limited company with Companies House and registered for VAT with HMRC and started the business a few months later.
They were so busy they could not afford time to carry out any marketing so used costly referral sites.
It was then discovered that when they set the business up with Companies House, they had told them they were not trading so Companies House asked them to contact them when they started to trade, unfortunately they forgot, Companies House had expected accounts starting 3 months earlier than thought, this took a lot of time to resolve and resulted in a fine.
Due to the pandemic, HMRC was behind with chasing up VAT however, it transpired the person A had not paid any VAT and owed more than £15,000, a call to HMRC to arrange a payment plan did not go well as they could not afford to re pay the VAT as well as the other regular expenses. They also had a large amount in the directors loan account which resulted in a high Corporation Tax bill.
How Could Cashtrak Have Helped?
We would have spoken with person A to understand their business, what they wanted to achieve and set the business up correctly with the relevant agencies, saving person A time and the business would have been compliant from the start. By having us set up the initial registrations, it would have saved a lot of time and the fine at the end of the year.
By undertaking their bookkeeping, it would have freed them up time to undertake marketing themselves or we could have recommended marketing businesses with successful track records which would have been another expense but would have brought in more business and would have paid for itself and saved money by not using referral sites.
We would have helped person A set up a direct debit for VAT so not missing a payment or reminding them in good time to pay it and provided guidance for being able to receive the same amount of money each month but with tax savings.
We would have been able to provide guidance on how to reduce the director’s loan account therefore person A to reduce the tax.
We would have also made them aware that that it is illegal to trade when insolvent – where a business does not have the funds to pay their debts which they were on the verge of and could have been struck off as a director and banned from being a director for a period of time.
Although, person A would never have got close to that situation should they have come to Cashtrak!