From tiny acorns grow mighty oaks.
You may have big dreams for your company, but even when you’re starting from humble beginnings, you may be wondering how you will manage your finances on your own.
In the early days of your business, it may not seem necessary to have an accountant or a bookkeeper. And it’s true – you may have spoken to other entrepreneurs who juggled their books and their day to day business alone and succeeded; not taking on a financial expert until the company was much larger and demanded it.
However, it’s likely that many more will tell you how hard starting a business can really be. Whether you’re just starting to trade or are beginning to grow, managing every aspect of a company yourself can be extremely stressful.
You may be capable of completing your accounting and bookkeeping yourself but this is not always the best option.
So, do I need a bookkeeper?
Of course, this is entirely up to you. It usually depends on how complex your business accounts are, your faith in your ability to carry them out accurately, and whether or not you actually want to manage your books yourself.
However, if you do decide to do-it-yourself and carry out your bookkeeping yourself, it’s possible you could be missing out on tax savings, on time better spent on running your business, and most crucially – on the assured accuracy of your books.
Miss out on savings
Whilst not hiring a bookkeeper may appear to save you money up front, the savings you could miss out on will be much greater. A survey from YouGov has found that 10% of SMEs claim back on almost no business expenses, with more that 20% claiming less than half of what they are entitled to.
A third of those in the survey also admitted frequently losing receipts, which would mean they’d be unable to claim back even if they wanted to.
Bookkeepers, in conjunction with your accountants, know exactly what your business is entitled to and can make the claim on your behalf. They’ll also manage your receipts for you digitally, avoiding the shoebox style of accounting that is common with new business owners.
Don’t claim all that you could
On your own, you’ll have to split your time between running the company and keeping your financial records up to date. A bookkeeper and accountant make your finances their sole focus – meaning you can get back to making sales and keeping customers happy. In the YouGov survey, 25% of microbusinesses said they would not claim an expense if it cost them less than £5, with 19% stating they would not claim on anything worth less than £10.
This may not seem like a lot, but as Ed Molyneux of FreeAgent said, “Whether it’s £5 or £500, that’s all money which business owners can claim tax relief on – and in the case of the smaller expenses, it’s also money that quickly adds up.
“Before too long, those little expenses can be worth hundreds of pounds, so it’s strange that people seem to think it’s too much hassle or not worth the effort to claim these back.”
Having a bookkeeper on your side means you’ll be able to maximise the expenses system, claiming back everything you’re entitled to – and keeping your cash in your own pocket.
Left to work things out on your own
When you work alongside a highly qualified and experienced bookkeeper, you can rest assured that they have helped dozens of business owners like yourself to succeed. You’ll have access to their expert guidance through each crucial stage of your business.
If you’re just starting out, they will help you lay the foundation for your business; ensuring you begin your journey on sturdy financial ground. From creating your business plan and separating your personal and business expenses to setting up your accounting software and business bank account, they’ll make sure you’re organised and fully prepared before you start trading.
Getting your business off the ground may also be much harder than it seems if you are also juggling your finances at the same time. You want time to focus on making sales, but instead you’re bogged down with payroll and processes, complicated financial statements, and countless tax and reporting requirements.
With a bookkeeper, you will have a qualified professional managing as many of your financial duties as you wish to delegate. They will be there to explain all of your liabilities and obligations and ensure that when your details are sent across to your accountant, they have to spend a lot less time on doing it (saving you on fees).
If you’re looking to grow your business, working with a bookkeeper will also mean you have the time to focus on the more important things. They can even highlight specific areas for growth within your company by providing in-depth insight into your cashflow patterns, pricing, inventory management and business financing.
Arguably most importantly, they can create financial forecasts to help you make better decisions for your business’ future.
DIY bookkeeping – speak to the experts
Sole traders and small businesses often choose to start out without a bookkeeper then begin working with one once they have a good number of clients on the books and their books becomes more complicated. But, as you can see, a bookkeeper can do so much more than just ensure your financial records are correct.
In the end, the decision to try DIY bookkeeping is completely up to you. It is like deciding to either take your car to the mechanic or try to fix it yourself. If you enjoy doing it and are confident in your abilities, you may be happy as you are for now.
If you do decide to want to start working with a bookkeeper, give us a call today on 020 7183 8241, or email us on firstname.lastname@example.org.