Xero Solution
Most business owners don’t enjoy bookkeeping or accounting. They end up doing it late at night or on weekends when they’d rather be spending time with their family and friends. Yet they carry on because they have a do-it-yourself (DIY) attitude and they think hiring an accountant is a luxury. After all, why not work a little later and do the books yourself?
That attitude needs to change. Getting an accountant or bookkeeper is not a lifestyle decision, it’s a business decision. Investing in professionals – or changing the way you use them – can bring considerable returns.
They’ll keep control of your tax obligations, identify savings, and help you grow your business. And yes, as a bonus, they’ll give you back your weekends. You just need to use them in the right way to make sure your money is well spent.
Here's what you are missing
As a small business owner, you have to do a lot yourself. There simply isn’t the money to outsource much. In deciding whether or not to get outside help on something, you have to ask if doing it yourself creates extra risks or costs.
Here are the potential downsides of DIY bookkeeping and accounting:
- Missing out on tax breaks by failing to claim valid expenses
- Falling behind with invoicing (and chasing unpaid accounts)
- You underestimate your tax bill and get into trouble with the government
- Tax returns and other compliance paperwork is filed late, resulting in fines.
- The books end up with mistakes that take hours to fix.
- You don’t have reliable information to help you make business decisions.
Why you need to get an accountant or bookkeeper
We specialize in helping owner-managed businesses as we see a lot of clients who started off doing their books. They come and see us when the job becomes too big or when they start making mistakes and losing money.
There are many things an accountant or bookkeeper can do for you but here are some key areas where they’ll help your business immediately.
Clean up your books once and for all
When business owners do their bookkeeping, it often only happens when they can find the time. That’s not giving your finances the attention they deserve, and it results in:
- Data-entry errors
- Lost documentation (such as proof of purchase of expenses)
- Missed tax breaks
- Books that are out of date
If you get an accountant or bookkeeper, they’ll clean everything up so you have accurate records backed up by documentation. They’ll even set you up with software that makes it much easier for you to update your income and expenses. That way you’ll never fall behind again – and you won’t have to pay for someone to come and enter data for you.
Do your taxes really well - and on time
Late filing or payment of taxes results in penalties and interest. We’ve taken on clients in the past who’ve lost thousands this way. When you get an accountant, you won’t miss any more deadlines. The good ones will work well in advance so that tax filing is smooth and stress-free. You’ll forget what it was like to dread tax season.
Plus an accountant can often reduce the amount of tax you have to pay. If you engage them at the start of the year and ask for tax planning services, they’ll come up with a strategy that keeps more money in your business.
Improve your invoicing and cash flow
Your invoicng system is central to the health of your business. If you don’t bill efficiently, you won’t get paid quickly – and that’ll leave you short on money. It sounds basic, but this factor alone undermines a lot of businesses.
As an example, I think of the plumbing and heating engineers that service our buildings. About two weeks after they’ve been, they send me an invoice which gives me 30 days to pay. If I pay on time, their business is waiting more than six weeks for the cash, even though the employees who did the work were paid the week the job was done.
Get an accountant or bookkeeper to set up an automated system and you’ll be able to:
- Send invoices quickly
- Check at any time to see which ones have been paid and which haven’t
- Give customers a choice of multiple payment methods
Accountants and bookkeepers can also give you good advice on invoice payment terms, to help reduce the time you spend waiting on money to come in.
Buy Xero now