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Bookkeepers can help your business with day-to-day accounts – recording sales and other transactions. But they can do a lot more too. So when does it make sense to hire a bookkeeper?
The tasks of a bookkeeperA bookkeeper is someone who records the financial transactions of your business. They also:
In this guide we'll look at what a bookkeeper can do for you, and when you might hire one for your business.
Why do you need one?If you started your own business, it’s likely that you’re passionate about running it and concentrating on the tasks you love doing. But if you’re like most business owners, you’re not so interested in recording all the details of every financial transaction.
For example, imagine you’re a hair salon business owner. You might have:
That's a lot of information to track and record. And bookkeeping might not be something you enjoy or have time to understand.
Without proper bookkeeping, it would be easy for transactions to go unrecorded, left to pile up until the end of a financial period. Mistakes could be made and important details could be lost or forgotten.
That's where bookkeepers come in. They can lighten the load on the business. They can take away the day-to-day recording of receipts, invoices and other transactions.
What do they actually do?Bookkeepers are trained and use the same financial recording methods as accountants. They do this so that your accountant can quickly and easily process your financial information. They will:
But there's more to bookkeeping than recording daily transactions. People who do this work are usually highly skilled at using accounting software. They will be able to advise you on:
They can also offer day-to-day support for small business owners. In fact a good bookkeeper is your partner in keeping things running smoothly within your business.
How are they different to accountants?Bookkeeping is a vital service. But how does it differ from accounting? The two services are often compared, but actually they are complementary:
For your business to run smoothly, ideally you need both people. You'd hire a bookkeeper to look after the day-to-day work. And you'd hire an accountant to handle official reporting and high level business advice.
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If I see another “I have Marie Kondo’d my wardrobe” after the recent release of Marie Kondo’s hit Netflix series I think I will lose my mind.So instead of taking that option (as it would be quite the contradictory reaction to the Marie Kondo rule of “Sparking Joy” phenomenon), if you can’t beat them, join them hey?
So if you have the time to organise your activewear drawer and fold all your leggings (that let’s face it are mostly not used for doing anything remotely active) then you certainly have time to sort out your finances.
So how can you apply the Kon Marie method to your business finances…well here is my take on it:1. Tackle one area at a time. So if your business finances are in a muddle – start small. Don’t just wake up one day and say “today is the day I am going to sort it all out”. It just won’t happen. Start with getting a separate business bank account, start with accounting software or setting up a kick arse excel spreadsheet, move on to understanding GST, setting up payroll, saving for the tax man, analysing income streams, then investigate any holes in your business spending. One thing at a time beats the old “gung ho dive in headfirst” approach any day.
2. Do the people that help you with your finances “spark joy”. Now I used to think this was a crock of shit – but I think in the business sense I get it. You can’t possibly forge a great relationship with your accountant, your tax agent, your BAS agent or your bookkeeper if you don’t trust them 100%. Like seriously, you should end up telling these people your goals, your plans, your life hurdles which effect business, when things are not working, your roadblocks – and you should feel comfortable reaching our for their help. If those people don’t make you smile, they are the wrong people.
3. Be prepared to let go. Not just of people who are not helping you, but of all the “things” that are just not servicing your business. Which other service providers are not delivering value? Which subscriptions do you pay and don’t log in to (come one we all have some). Which events are you attending that are not giving you a return on investment? How are you spending your time and it is valuable to your business growth. You need to remove the unnecessary costs (and trust me when I say wasted time is certainly a cost) in your business that you have “just because”. “Just because” is no longer an excuse to do anything.
4. Commit. Either to learning or finding the right person to take over. There is not a one size fits all solution here. It might be that you need a few initial training sessions to set your accounting software/budget up right, then perhaps a half yearly check in. You might be a hands on person so need to sit face to face with someone. You might feel better outsourcing the whole kit and kaboodle. Whatever is right for you, commit the time and head space to sorting it out. Block out those times in your diary. This shit is important.
5. What deserves your time and your energy? Like the super organised active wear drawer – when we look at it we are proud and it makes our life easier. We open the drawer, pick a new set to wear and we are on our way with ease. Your finances should be just as easy to navigate. You should be able to run reports at the click of a button, the reconciling should be done (and I don’t just mean ticking off the bank feed – that is not enough). You don’t want to open the “finance drawer” and have receipts and paperwork jumping out at you so you quickly close the drawer before anything god forbid happens to escape. If you organise chaos, you just get organised chaos.
So there you have it, not only should you have the best looking wardrobes in town, but your business finances (and mental headspace around your finances) should also be spick and span in no time.Thanks Marie Kondo, I might just go and find a few more things that “spark my joy” right now.