A business owner has the right to obtain information from the bookkeeper to find out if the business is still doing well. Your business may be in the right direction, but it can be a different thing once you scratch beneath the surface. If a business owner fails to check the records from the bookkeeper, it may be too late before you find out that you are falling behind your tax payment schedule and do not have a steady cash flow. This is indeed very unfortunate for a business owner, but the main problem is due to the failure to monitor the activities of a bookkeeper. As a result, you become clueless as to why your business does not give you the outcome you are expecting.
When you are reading financial reports that you cannot easily interpret, it is as though your head is in the clouds. Business owners may take time to obtain basic bookkeeping techniques and when they do, bookkeepers are expected to renovate reports so that they are much easier to read. If you find it difficult to read reports, your bookkeeper should be open to revising them.
Bookkeepers should be aware of the needs of your business. Just because they are providing bookkeeping services does not necessarily mean that one size fits all. It is also their obligation set up packages that perfectly fit the industry your business is involved in.
Due to inefficiencies of bookkeeping services, a business owner may spend more than usual. If a bookkeeper does not see the underlying issues of a business, the financial aspect of your business will sure suffer. Your bookkeeper should provide you a range of plans to reduce cost.
A bookkeeper is not the only person responsible for the business finances but the accountant as well. This is why a good bookkeeper should liaise to the accountant to confirm updates. When a bookkeeper communicates with the accountant at least twice a year, they will be able to capture changes that took place in your business. The accountant will also give guidance and advice if there are changes made to the system.
These days, business owners are keeping up with the changes in bookkeeping. With that said, a bookkeeper should be able to recommend a system that will promote efficiency in every business transaction made. The use of bookkeeping software can make a huge difference not only in terms of getting the job done but also in ensuring that accurate information is entered.
These questions are going to be helpful in setting your expectations as a business owner. You will be able to know if a bookkeeper can provide your needs and help you achieve your goals.
A bookkeeper is going to be an essential entity of your business. They are responsible for ensuring that the financial aspect of your business is well taken care of. Some examples of tasks that a bookkeeper needs to carry out include filing tax returns, lodging timely payments, keeping receipts and releasing correct reports. In short, a bookkeeper makes the life of a business owner easier. However, when a bookkeeper fails to deliver on the tasks it promises, it is about time you rethink things.
A business owner may need to face the consequences of hiring an efficient bookkeeper if the problem is not addressed right away. There are warning signs that allow a business owner to identify the signs of an inefficient bookkeeper.
The financial report is one of the paperworks that a bookkeeper needs to keep an eye on. This report is time-sensitive because this is where business owners determine which direction their business is heading. When this essential report is not submitted in a timely fashion, the business owner is denied of the chance to go over it. When late submissions become a habit, you need to find out the underlying causes for these delays. Is it the lack of resources that deter a bookkeeper from submitting reports? If so, both bookkeepers and business owners must explore viable solutions.
An access to the financial report is important so you will keep track of your financial activities. When there is lack of information, a business owner will not know about the steps that need to be done in order to resolve bookkeeping issues. You have the right to know about the details of the financial report so you will be confident that ATO receives correct and accurate information about your business. Scheduling a meeting also allows you to correct mistakes, which can wreak havoc on your business especially when it comes to filing tax returns
Commitment is important for a bookkeeper to succeed in carrying out bookkeeping tasks. Without commitment, a bookkeeper will feel as though the daily task is an obligation. When a bookkeeper is committed to helping your business get bookkeeping tasks done, a business owner will no longer have to worry about them.
When mails from ATO are received frequently, you need to conduct your own investigation so you will know what really is going on with your bookkeeping task. Essential details must be handled properly and recorded on a regular basis. You may need to schedule an appointment with the bookkeeper so you will know what is going on with your finances. If they cannot provide satisfying answers, you may need to look for a more reliable bookkeeper to do the job. Your business is more likely to suffer if you are going to allow an inefficient bookkeeper to take care of your financial activities.
Studies show that 78% of businesses will switch to cloud operation by 2020. At present, approximately 65% of small businesses are already using cloud applications. While cloud applications can make daily bookkeeping tasks fast and easy, the future roles of bookkeepers are still open to question. Now that more and more businesses are considering cloud software as a welcoming relief, are businesses going to say goodbye to traditional bookkeeping?
If bookkeepers are going to view these changes from a more positive perspective, they will consider this as an opportunity to step up. Just because modern bookkeeping sets the pace does not necessarily mean that bookkeepers cannot build upon the role. Bookkeepers can remain valuable if they prepare for the changes happening in the bookkeeping industry.
1. Knows the ins and outs of cloud applications
In modern bookkeeping, bookkeepers are expected to be tech-savvy because they are going to use cloud applications, collaboration tools and other accounting applications most of the time. Using cloud applications differs from the traditional data entry role. A bookkeeper needs to be familiar with the functions of cloud applications because timely and accurate reports are going to be necessary.
2. Substantial bookkeeping experience
Continuous learning is important in modern bookkeeping because dealing with basic bookkeeping task does not last forever. A bookkeeper needs to learn advanced bookkeeping techniques to keep up with the changes taking place in the industry. When a bookkeeper is exposed to various types of businesses, skills are not just limited to basic bookkeeping.
3. Formal training
Since bookkeepers are more than just data entry clerks, formal educations are also essential in becoming a modern bookkeeper. Aside from specialized training, a bookkeeper needs to have accounting and finance degrees to excel at modern bookkeeping. These bookkeepers will be dealing with Quickbooks, Xero and other bookkeeping applications most of the time and familiarisation with these applications are required.
4. Following best bookkeeping practices
Bookkeepers need to learn the business’ Key Performance Indicators (KPI’s) so actionable reports are created. When bookkeepers are well-aware of the advanced techniques to employ to make the system as efficient as possible, the best service is provided to clients.
5. Ability to understand modern bookkeeping
The best bookkeeping practices are not necessarily found in books. This is why a bookkeeper with entrepreneurial spirit will be able to understand modern bookkeeping and deal with the challenges that it may bring. A modern bookkeeper must have the ability to use social channels to engage with potential clients.
Bookkeeping is a task that demands accuracy because the financial information is used for analysing the financial standing of a business. Taking on all your bookkeeping practices can be a problem in the long run especially if you do not have sufficient knowledge and training. Bookkeeping tasks should be left to a bookkeeping professional to ensure that everything is in order. One of the problems that business owners will face due to DIY bookkeeping is poorly submitted financial data. It is difficult to resolve ATO queries if your financial data indicate potential problems.
1. Losing records. Business owners often lose track of important receipts, which are used for filing tax returns and claiming for GST. These receipts need to be recorded regularly so you can present a detailed record to ATO in case they need it. When you resort to DIY bookkeeping, these important things are overlooked.
2. Unable to deal with bookkeeping software’s complexities. While the basics of bookkeeping software can be learned, there are still some complexities of bookkeeping software that you need to tackle so you will know what needs to be done. When there are underpayments on your tax returns, the tax office will penalise you for it. However, you can save yourself from the stress that the process gives when you leave your bookkeeping software to an expert.
3. Missing deadlines. Another way DIY bookkeeping can wreak havoc on your business is when you fail to lodge your tax payments on time. It is easy to keep track of important payment dates if you have a bookkeeping professional to deal with them. A bookkeeper will be the one to schedule and track due date so the necessary paperwork is completed on time.
4. Cannot track expenses. It is difficult to identify the receipts relevant to your business and tax deduction if you have missed out on tracking your expenses. Even in petty cash, you need to make sure that you know where your money is going. If you do not keep receipts, you just cannot claim for every receipt you have. This is going to create chaos in your business.
Business owners may think that hiring a bookkeeper is costly, but running a business without a bookkeeping professional spells more trouble. Before you decide on considering DIY bookkeeping, think about the advantages of having a bookkeeper to complete the task. You will not worry about your expenses and tax payments because a bookkeeper will take care of them.
Modern bookkeeping has turned every business owner’s life around because it offers efficiency, speed and quality. A task that used to be done in hours can now be carried out within just a matter of minutes. The information becomes much easier to access and everyone can collaborate and contribute to make the system more efficient. It is indeed a whiff of fresh air for business owners who used to dread bookkeeping tasks.
Although most business owners have already turned to modern bookkeeping technology because of the benefits that remains unmatched by old-fashioned bookkeeping, there are still some who are still quite hesitant to make the switch. It is not just about the problem with switching to an unfamiliar bookkeeping territory, but ditching the old system and suddenly embracing the new approach.
If you are going to look at the big picture, you will discover the once untapped potential of bookkeeping back in the day when entrepreneurs settle for the sluggish and demanding manual generation that requires accuracy. Imagine spending gruesome hours for data entry alone and when details do not match the bookkeeper’s or the business owner’s data, you will have to redo the process. This bookkeeping ordeal had come to an end when modern bookkeeping technology became part of the picture.
Although it can be quite overwhelming to make that sudden switch, the benefits that modern bookkeeping provides are enough to convince even a small business owner to embrace changes.
The financial aspect of your business should be taken seriously because mishandling your finances can impact your business. Financial management includes accounting, bookkeeping, raising capital and cash flow management. Even if you are a small business owner, you need to make sure that your daily operations are monitored closely because one wrong move can make your business suffer. Although it is not a requirement for business owners to spend years studying the ins and outs of bookkeeping and accounting, understanding where money goes can make a difference.
Careless spending. Avoid overlooking expenses because if there isn’t enough money to cover all of your business expenses, you will not be able to move forward. When you do not monitor your expenses, there is a tendency that it will pile up. When the time comes you need to make a payment for your bills, you lack financial resources to obtain cash from. Business expansion will not be impossible if you can deal with business expenses without worrying about falling behind your payment schedule.
Delayed payment of taxes. Taxes are essential to every business and it is important that you pay them in a timely manner. Since late payment of taxes can have a negative effect on your business, you need to create a financial plan in advance so you can keep track of your payment schedule and pay taxes.
Poor cashflow management. Managing your cashlow is also important and this should involve monitoring payment for insurance, phone, rent and many others. When you plan ahead, you will be able to know potential problems even before they arise. You should also be aware of cash flow gaps because they can also happen at some point.
Managing the financial aspect of your business is not an easy task especially when you need to take your financial obligations into consideration. Delayed payments are a sign that there is something wrong with your finances. You have to review or reassess your spending habits so you will know what could have gone wrong.
If you are struggling with your business finances due to mishandling your cashflow, it is time to identify the culprit behind because taking these problems for granted can have a negative effect on your business that is beyond repair. Your bookkeeper can help you put your business in proper perspective and help you maintain your cashflow so you can make timely payments and prevent your business from becoming a complete failure.
Do you perceive strong online presence to be a costly and time-consuming technique? Have you ever thought of the importance of strong online presence to your bookkeeping practice? As a business owner providing bookkeeping services, you need to make sure that you are sending the right messages so you can attract clients and generate leads online. Improve your online presence with these techniques:
Social channels are effective in improving your online presence because it provides prospective customers a time to connect and to know more about your company. However, when you use social media for connecting with your customers, you need to dedicate your time and effort to supply these channels with engaging and compelling content. If a visitor stumbles upon your company’s social media account and found nothing, the purpose of getting people to know your business will be defeated.
These social channels can help businesses promote services and share expertise. LinkedIn is one of the very effective channels capable of finding leads and networking with contacts on the same industry. It is also help to consider the social streams as this will help you determine where your efforts should be concentrating on.
When it comes to finding the right formula to communicate to your new and existing clients, irrelevant information becomes a roadblock that you need to remove if you want a steady flow of customers to come knocking on your door. Most of your social media posts should be focused on driving traffic to your website. These posts must be carefully crafted so you can present your business in the most effective way. Blog posts should be given importance because you can link through to them using social media accounts. As a result, your audience will keep on returning to your website and engage with your business. They can also share your content with their own networks.
Social media allows you to have a voice so you can communicate effectively with new and existing clients. Social media is an effective tool if you are going to take a strategic approach. Keeping your interactions meaningful and regular is one thing to ensure positive client engagement. You will need to create a basic quarterly plan so you will know when you should schedule them. It can either be weekly or twice a week. As much as possible, you should make it a habit to schedule posts ahead as something may come up that stops you from supplying channels with regular posts.
Since almost all businesses are going digital these days, taking advantage of social media channels to promote your business can make a difference. Regular interaction with your clients can take your business to the next level.
One thing that makes bookkeeping industry interesting is that anyone can become a potential customer. Every opportunity that knocks on your door is a good sign for your business. Once income starts coming in, the next thing to do is to push your profits to the next level. Due to the competitions in the bookkeeping industry, it is important that you concentrate on a specific niche that will define the nature of your bookkeeping business.
When you establish a niche, you are promoting yourself as an expert in a particular area of bookkeeping. Your niche may be focused around an industry, type of business owner or a location. The downside of allowing your business to be part of a crowded industry is that potential customers will have so many choices and sometimes, your business can get lost in these choices. However, if they have a specific niche to focus on, you will be able to define your areas of expertise and give them an option to get the bookkeeping business that fits their expectations and needs.
• When you consider creating a niche for your bookkeeping practice, you have more opportunities to determine an effective marketing approach that will work for your business. This marketing approach will give you the ability to have a unique selling point. As a result, you are targeting your customers and creating qualified leads.
• You will be able to stand out online when prospects are looking for a specific service. If you are going to settle with generic bookkeeping service, you are most likely to be lost in the crowd because you do not have any unique services to offer.
• Building a niche can also provide you attractive networking opportunities. This is also your time to build confidence in environments, which can generate referrals and better business. If you have done an impressive job on a specific area, you will become the go-to person when clients need help in a particular area of a bookkeeping service.
• If you want to make it big in the bookkeeping industry, finding your niche can open the door to additional business opportunities. Not only will you become more involved in business and financial management but you will also have more time to concentrate on an area that will improve your bookkeeping service.
The thought of finding your niche can be overwhelming and your starting point may be one of the reasons you are deterred from pushing your business to the next level. Start by reviewing your client database. If you see any trends in the type of customers you have, focus on a particular industry where you can establish your niche.
You should also identify the kind of networks or relationships you currently have that you can leverage. If you have a connection in a particular industry, you should also join associations related in this network so you can expand your network. You can also find your niche if you focus on a particular service that you consider profitable. If you have high-paying clients, find more like them.
There are many small business owners who excel at creating impressive products and services, but may need extra help with basic bookkeeping. Business owners need to have a clear financial picture of what is going on with their business so cash flow problems are prevented. Do you already have an idea what your accounts receivable look like? Do you always have delayed bills payment? Although you have a bookkeeper to read financial reports, it is still your obligation to understand the figures so you can determine if your business is still on the right track. Keep in mind that your financial records provide you an idea of the health of your business. These records must be kept for six years.
• Sale ledger confirming the receipts of cash and cash owed by debtor to the business;
• Cash book or statement where money spent and received are entered;
• Purchase ledger where business-related information is recorded;
• Wage and salary ledger confirming all salary and National Insurance expenses;
• Details of GST charges for businesses which are GST registered.
Efficiency is required for bookkeeping endeavors to be successful. You become more involved in bookkeeping once your business becomes larger and more complex. While there are some strategies that may help you survive the concrete jungle of bookkeeping, unable to understand bookkeeping basics will render advanced techniques useless.
It is also imperative that you learn how bookkeeping works before you jump on to the more advanced approaches that will make day-to-day transactions a breeze. As they say, you have to walk before you run and the same is true with managing a small business. As you employ additional employees for your business, you need to make sure that everything is put in proper perspective.
Do you know how some entrepreneurs end up losing their business? Poor financial management is a serious issue that needs to be taken seriously. Accounting fraud is a serious offense and should not be ignored. If you do not understand how the system works, your business will have difficulties moving forward. Bookkeeping may be a simple task that some small business owners often overlook, but it has a serious impact on your business.
When recording your expenses, your bookkeeper should have two journals, one for cash receipts and the other for cash disbursements. A business owner should also follow best practices for collecting payment. It is important for bookkeepers and business owners to track accounts receivable. This refers to the money due from customers. It needs to be kept up to date as this is also critical to your business.
The products you have in stock are also important and they need to be accounted for and tracked. Make sure the figures in your books are periodically tested through inventory. Aside from accounts receivable, you must also give importance to accounts payable. Timely payments are encouraged so your business can qualify for discounts. There are other aspects of your business that need attention such as purchases, payroll expenses, loans payable, owner’s equity and others.
Cash flow is the heart and soul of the financial aspect of your business. Without it, any activity that requires the use of cash will not prosper. Business owners use cash for paying suppliers, employees and others who are serving your business. If cash flow is handled properly, you can generate an impressive return on your investment. However, this will only be possible if you are going to keep an eye on your cash flow. While there are still aspects you need to keep an eye on, your cash flow must be closely monitored because when left unchecked, it can be one of the reasons for a failed business.
How will you know where your money goes if you do not track your expenses? Money movements must be tracked for your business to survive. Make sure you track the invoices issued and paid to your clients, the invoices received and paid and the taxes withheld. Use bookkeeping software to ensure that your information is updated. Aside from making the process easier, you can also stay on track with the movement of your money.
You can avoid cash flow issues if you consider submitting a project proposal. This way, your payment conditions will be clear. You should also see to it that the invoice you send has clear payment terms. You can also increase the chances of getting your invoices paid if you use magic words: “please” and “thank you”.
If there are bad debts you need to follow up on, remind them in a friendly manner. The email should outline the details of the payment and schedule follow-ups including phone calls and email messages. Some software allows you to enable late payment reminders so you can regularly follow up on bad debts.
It is also a good habit to schedule the payment of your bills on or before the due date. This is a good practice that professional organisations should follow because it keeps your cash flow in check. Being unmindful of your payment due date can be a problem in the end if the bills start to pile up.
Cash flow forecast is important as this allows you to determine if you still have enough cash to spend. If you do not know how a cash flow forecast works, you can ask your accountant or bookkeeper to create one for you. When you forecast cash flow and compare actual figures, you will be able to identify the areas of your business that require immediate attention. If there is a discrepancy between the two, make sure you examine further so you will know if there are uncontrollable spending going on. It is easy to identify which areas of your business you should focus on if you have a cash flow forecast. Many young businesses face cash flow problems and when these are not addressed immediately, your business can take a nose dive as it will not survive considering the expenses associated with managing a business.