Why is it important to hire a bookkeeper?

As your new business begins to turn over cash for the first time, you’ll begin to consider when to hire a bookkeeper to help manage your ever-increasing accounting admin.

Perhaps you’ve been trading for a while now and have never enlisted the services of an advisor of any kind. But now you’re only just beginning to wonder whether your operations could benefit from hiring a good bookkeeper.

To ensure your small business is afforded the best chance of success, it’s time to understand why you need bookkeeping services.

Does a small business need a bookkeeper?

‘Why do I need bookkeeping’? This is a common query amongst small business owners, especially those just starting out in the small business world. 

You may see it as an unnecessary expense, or perhaps you’re simply not aware of the value that bookkeeping services will bring to your operations.

Many Australian small businesses seem to believe they don’t require the services of an accountant or a bookkeeper and can save money by managing these tasks themselves. 

It may be so that you can survive and even thrive without one. However, once you realise the raft of benefits advisory services unlock, you may alter your viewpoint. 

Does your small business need a bookkeeper? Let’s analyse the benefits of hiring a bookkeeper and the tasks to undertake to find out.

What does a bookkeeper do?

What does a bookkeeper do for you? What are some common bookkeeping tasks? 

• processing and advising upon tax returns
• general ledgers
• BAS, payroll, and super advice
• reporting on cash flow and providing recommendations
• data entry and balancing the books
• monthly reports
• accounts receivable and payable 
• bank reconciliation
• accounting software advice
• expense tracking
• ATO compliance
• invoicing and receipt management

Why and when do you need to hire a bookkeeper?

Why do you need a bookkeeper at all, and if so, when should you hire one? These are important questions that will affect the very operation of your small business and the decision shouldn’t be taken lightly.

Why you need to hire a bookkeeper?

Professional bookkeeping services shouldn’t be seen as an expense, but rather an investment in your business’s prosperity and future stability. 

Hiring a bookkeeper help keep you financially fruitful, compliant and risk aware. But their services will also free up your time to focus on sales, marketing, employees, and other business priorities.

Key reasons why you need to hire a bookkeeper:

• • Accuracy of financial information
    By accurately reporting on your cash flow, expenses, revenue, accounts receivable and more. A bookkeeper helps keep your business afloat and financially viable. By reporting any risks you need to be aware of and ensuring you have an accurate and full view of your business finances, you can always be confident of your position.

• Compliance with the ATO

By assisting you with payroll, super, BAS, receipts and business expenses, a good bookkeeper will nullify any guesswork when it comes to compliance. Better still, they can help you maximise the potential of any tax breaks, schemes (like IAWO), grants or tax exemptions.

• Reducing business costs

A good bookkeeper will be looking for any potential savings in terms of cash flow enhancements, suppliers, financial products, expenses, and overheads. It’s their job to make sure your business is as lean as possible to reduce unnecessary expenditure and maximise savings and revenue.

Bookkeepers and your accounting software

A bookkeeper will also usually gain access to your accounting software to manage day-to-day data entry and compliance. They can be tasked with ensuring your data is recorded correctly and in the right place. 

A bookkeeper will make use of your accounting software to focus on the following:

• Invoicing
  A bookkeeper will keep track and record all your invoices and receipts in your solution, including accounts receivable and payable.

• Data entry

A bookkeeper will enter data into your accounting software and ensure timeliness and accuracy.

• Expenses

They can manage all your business expenses, ready for tax deduction claims, and ensure receipts are recorded properly.

• Payroll
  They can manage your payroll processes and ensure accuracy and timeliness as well as ATO compliance and super concerns.

• Banking
  Most accounting solutions have direct bank feed functionality. They can be directly managed within your solution by your bookkeeper by downloading banking information and reconciling accounts.

• Reporting

A good bookkeeper will also use your accounting software to provide regular reporting. This includes cash flow, budgets, balance sheets and profit and loss. These are then used by the business owner to make better financial decisions and understand their position with more clarity.

When do you need to hire a bookkeeper?

So when should you be hiring a bookkeeper? There’s no wrong answer necessarily, but there is one particularly correct answer: immediately.

When you first get your business off the ground, the services offered by a bookkeeper should usually be engaged straight away. 

The reason for this is that they’ll have particularly pertinent advice and services that will affect the way you set up your business.

Instead of making financial and structural decisions on your own, you’re best served consulting with a bookkeeper first. 

They’ll head off any unwise decisions before repercussions are felt. They’ll reduce the amount of reconfiguration or workflow changes that would eventuate from gaining advice later in your business’s lifecycle. As they say, prevention is better than a cure and this holds true with bookkeeping.

Should you hire a bookkeeper or an accountant?

There are a lot of misconceptions when it comes to the difference between a bookkeeper and an accountant. Let’s clear them up so you can better understand the difference between their services.

• A bookkeeper is focused on the transactional nature of business. They concentrate on the day-to-day operations of a business and will undertake compliance work and produce reports.
• An accountant goes further and creates insights and deeper recommendations and analysis based on this data. 

If you require day-to-day support in terms of data and compliance, a bookkeeper is perfect. If you feel you need richer advice such as forecasting and future focused advisory and business model services, you may wish to consult an accountant.

While there’s a lot of crossover in their services, an accountant can undertake the role of a bookkeeper, while a bookkeeper will not go as far as the services offered by an accountant.

Hiring a bookkeeper or accountant

Hiring a good bookkeeper that’s local and dependable is an important decision. You’ll be trusting them with your financial data and compliance, and you’ll need to form a strong working relationship.

If you’re now aware of the benefits that come about by engaging bookkeeping services, you can make use of our free bookkeeper search tool to discover and hire a professional in your local area.