Bookkeeping is one of those jobs that most people attempt themselves when their business is in the start-up phase.
This generally makes sense as a few transactions plus an excel spreadsheet can make it both an achievable and an affordable task.
But as your business grows, when do you know when to quit?
Are there any obvious signs that scream out that it’s time to outsource your bookkeeping to an expert?
At Fresh Financials, we work with businesses of various sizes and complexities. Some of whom have decided to outsource from the beginning and others who have left it, let’s just say, too late.
So, if you want to avoid having to pay to have your bookkeeping cleaned up, here are three signs that you may be reaching the point where you should consider outsourcing.
You begin to find the software confusing
Often the first step business owners take when they want to streamline their bookkeeping process, is to make the leap from Excel to some accounting software.
We fully commend anyone who decides to do this, but it is worth mentioning that accounting software is simply a tool.
Most of us have seen the television ads for QuickBooks or Kashflow that make out that by using their software, completing a VAT Return will be a simple click of a button. And whilst that may be true in some cases, you need to understand how to complete a VAT Return and how to use the software for that scenario to pan out in reality.
So, if instead of powering through your bookkeeping, you’re sat at your computer, getting increasingly frustrated and wishing you’d stuck with Excel, it’s probably because you don’t understand the software.
But please try to resist the temptation to revert back to Excel. It’s great for small, simple start ups but once your business is up and running, accounting software is a sound investment. Especially software like Xero that has the ability to grow with your business. It might just be that you’re not the person who should be using it.
The numbers don’t make sense
Some people understand numbers. Others don’t.
But what if you understand numbers but just can’t get your head around the numbers your bookkeeping is producing?
Maybe you have completed your bookkeeping for the year, handed it to your accountant and they’ve returned with accounts that bare no similarity to your own records.
Is your accountant forever pointing out adjustments that you need to make? Or increasing their fees?
There are quite a few signs that your bookkeeping isn’t up to standard and it is worth really paying attention to these.
Because poor bookkeeping is no use to anyone.
Records that show you are making a profit, when in reality you are making a loss is a costly mistake. Cash flow is the life line of your business, so not monitoring the correct incomings and outgoings of your business will open the door to mountains of stress later on.
Investing in bookkeeping that you trust will be a massive asset to your business. We’ve worked with so many businesses that have grown, both in size and confidence, once they have the financial information available to help them to make better business decisions.
It feels like a chore
And of course, there are times when you can use the software and the figures you are producing are accurate, but you simply do not want to do it.
Is bookkeeping forever on your to do list and always will be because you continually leap frog it with more exciting and interesting tasks?
Maybe VAT Returns which were once completed just after the quarter end are now being left until the day before the deadline.
If you are rushing your VAT Returns then this can increase the chances of you making mistakes, no matter how competent a bookkeeper you are.
And bookkeeping that hasn’t been done is simply meaningless paperwork.
If you only have 30 minutes to do your bookkeeping, wouldn’t it be better to spend that half an hour, reviewing and discussing accurate figures with a qualified professional, rather than entering expenses into some software?
As your business grows, it becomes increasingly important to spend your time wisely. You can still do the finances but maybe shift what doing the finances means.
If you would like to talk about outsourcing your bookkeeping, visit our Become A Client page for more information.