Lets talk about Bookkeeping
So...What is a Bookkeeper?
Bookkeepers assist businesses in preparing and recording everyday transactions such as payroll, invoices and bills. They provide timely information to the business owners by preparing management reports and financial statements. Bookkeepers can also be responsible for liaising with the ATO and ATO lodgements including Business Activity Statements (BAS), Instalment Activity Statements (IAS) and Annual Payment Summary Reports. If performing any BAS services it is essential that the Bookkeeper is registered with the Tax Practitioners Board.
If you would like to check a bookkeepers registration, you can do so here: https://www.tpb.gov.au/registrations_search
Some of the tasks of a traditional bookkeeper include:
Recording and coding transactions in an accounting software (eg Xero)
Prepare bank reconciliations
Entering accounts payable invoices
Payment of accounts payable invoices
Preparing and sending sales invoices to customers
Processing payroll and maintaining employee records including super and withholding taxes
Preparation and lodgement of ATO forms such as IAS and BAS
A value add bookkeeper will also provide some additional services including:
Balance sheet reconciliations for other accounts such as Hire Purchases and Fixed Assets
Management reports and analytics
Job tracking and profitability
Implementing and streamlining processes to enhance efficiency
Evaluating, suggesting and implementing apps that bring value to the business
Cash flow forecasting and budgeting
Bookkeepers can be employed by the business as an internal employee or as a external consultant or adviser to the business. With today's technology, for most small businesses there is no reason to have an internal bookkeeper. All good accounting software is online and use of cloud business apps the bookkeeper is able to access and process data from anywhere.
Some other benefits of an external bookkeeper compared to an internal bookkeeper are:
Training - When hiring an internal bookkeeper, the reliance on keeping that employee up to date with training, new industry standards and best practices is the onus of the employer. Hiring an external bookkeeper as a consultant or adviser means that the reliance for training is placed back on the bookkeeping practice. Most practices with a few employees or more have standard team training all year round meaning that you can take comfort that the bookkeeper knowledge is up to date and relevant.
Registration - Anyone offering BAS services externally to your business must be registered with the Tax Practitioners Board. To obtain this registration there is very rigorous training and hands on experience required and to maintain registration there is a certain number of development or training hours that must be undertaken each year. An internal employee however does not have to have this same registration. This means an external bookkeeper may be more qualified to prepare and lodge ATO obligations.
Diversity of Experience, bench marking, best practices and technology - An external bookkeeper usually works for more than one business at a time and with larger practices many businesses at a time. This means that the bookkeeper is gaining on the job experience with other clients which can translate into additional expertise to bring to your business. The bookkeeper is able to apply insights they have gained from other businesses, implement best practices and experience other technologies which may end up being a great fit for you business as well.
Cost and HR - An employee bookkeeper comes with standard HR employee issues and employee entitlements such as super and leave not to mention you are paying them for any unproductive hours. All these extra costs add up especially if the employees is full time. With an external bookkeeper you pay for the value you are provided.
If you would like to discuss what a bookkeeper can do for your business, please contact us as Abacus Bookkeeping Group!