One of the first things to consider when expanding your small business is how to delegate tasks that you don’t have to do yourself. For a lot of people, the first thing that comes to mind is the bookkeeping.
Some people enjoy doing the books, but for others it’s a real chore. And the bigger your business gets the more time it takes. My own set-up as a web content business is quite simple, but if, say, you’re in retail and have a lot of stock to account for and sizeable payroll, it can all get a bit complicated.
It should be easy to see how much time your bookkeeper is saving you each week. However, a lot of the benefits are not so easy to quantify – but no less important. It’s all about preventing a crisis from happening rather than picking up the pieces afterwards.
Keeping on top of the books will mean that invoices get chased early and the money comes in with regularity. If you don’t chase your invoices promptly you give the impression that you’re not in control of your finances, which makes you an easy target for late payers. And if the money’s not coming in, salaries and rent can’t be paid…you can see where this is heading!
Maybe someone has underpaid you – your bookkeeper will be able to spot this quickly and have the paperwork to hand to back it all up. If someone accuses you of invoicing for the wrong amount they can act quickly to rectify the situation whereas you can only look at it when you’re back in the office, when you’ve made that phone call, when you’ve completed that project.
It can be very difficult for small business owners when they have a client who won’t pay up – you want to talk tough about money but don’t want to risk upsetting them for fear of losing the work. Having a neutral third party who can contact them separately about the overdue invoices can help enormously. Having an accounts department also gives you more clout, makes you appear like less of a one-man band.
A good bookkeeper will keep up with the latest changes in financial regulations, and will make sure you are compliant with the law. So no nasty fines for inadvertently not paying the right amount of tax. And if HMRC decides to come and audit your accounts you won’t waste three weeks in a panic getting all the paperwork together.