BUSINESS DEVELOPMENT www.images-magazine.com 26 images NOVEMBER 2022 What can a bookkeeper add to my business? Did you know that around 80% of new businesses fail within the first 18 months? Poor financial management is one of the main problems for these businesses. Why? The answer might be surprising: 53% of small business owners don’t have a bookkeeper, and they attempt to manage their money themselves. Bookkeepers are responsible for providing accurate, up-to-date financial information about a business. They’re one of the biggest assets of the business. As a business owner, you need to make sure that you have the right financial information in order to make the best decisions for your business. Bookkeeping is the process of recording your business transactions so you know exactly how much you’re spending and what you are spending it on. There’s a number of different taxes small businesses need to pay throughout the year, and bookkeeping means you can correctly calculate how much is due. This helps you prepare for the financial year ahead and allows you to think about what your next move is, whether that’s growing your business or setting up a limited company. A bookkeeper can add value to your business by saving you time and money through managing your finances for you. They will know and understand all the rules and regulations, keeping your business and finances updated. They can ensure you pay your invoices on time, and will also pick up any cashflow issues and give you the correct advice by providing solutions. Already have an accountant? You will still need to keep on top of your bookkeeping, such as getting your invoices out and recording your expenses, as they simply are not able to do their job without knowing your income and outgoings. When your bookkeeping is in good shape, your accountant can help you with things like making tax-efficient decisions, such as how much to pay yourself, what business structure is right for you, and when you should register for VAT. It’s also worth remembering that if you dream of expanding your business, you’ll need to be able to prove its profitability to investors, new partners, and banks. Good bookkeeping practices can help you with this. Many bookkeepers can also prepare tax returns and accounts, but some do not and just stick to bookkeeping. This depends on the individual’s experience, as well as the type of licence they have with their governing body. If you have a bookkeeper’s licence, there will be things you can and cannot do. We [Isle Bookkeep] do everything as we have a full accountancy licence. Core bookkeeping duties ■ Data entry Recording financial transactions and balancing the books. ■ Bank reconciliation Crossreferencing the books against bank statements and other source documents to confirm accuracy. ■ Monthly reports Summarising the business’s financial position. Additional duties ■ Accounts receivable (and credit control) Creating and sending invoices, and following up to get them paid. ■ Accounts payable Making sure invoices from suppliers are accurate and paid in a timely manner. ■ Payroll Calculating pay and deductions. Advanced duties ■ Tax filing Preparing tax returns. ■ End of year reporting Assisting with annual profit and loss and balance sheet reports. ■ Business strategy Creating budgets and forecasts, and advising on how to improve the business. ■ Business process Reviewing, researching and implementing software solutions and internal controls to streamline the business and enhance performance. ■ Training Working with staff on best practice bookkeeping and use of software solutions. ■ Virtual office Providing a fullservice virtual office, for example telephones, postal address, and email communications. ■ Liaison Meeting with accountants, on behalf of their clients, about financials and tax queries. Acting on behalf of the client with the tax authorities. Costs Pricing for bookkeeping can vary depending on a number of factors. The majority of firms charge £30-40 per hour. At Isle Book-keep, we price based on the number of transactions (falling into a bracket) and then review this every three months to ensure you’re in the correct bracket. We feel like this is the best way for us as we can give our clients certainty over the price they pay. All of our clients are on monthly direct debits and the work is completed every month, so there are no large bills at the end of the year and no surprises. Memberships to look out for include AAT (Association of Accounting Technicians), ICB (Institute of Certified Bookkeepers) and IAB (International Association of Bookkeepers). We are fully AAT-qualified with a full accountant practising licence. Expert advice on the business of running a garment decoration company Q&A Lucy Johnson is the owner and accountant at Isle Book-keep, an award-winning bookkeeping and accountancy practice that specialises in helping small business owners feel relaxed and more in control of their finances. www.islebook-keep.co.uk
RkJQdWJsaXNoZXIy NjgxMzM0