Classic Events

the book keepers

Year: 2018

Control Your Accounting and Bookkeeping Costs

When you started your business first, you maybe did your own bookkeeping; and it worked well. You were short on spendable capital and most of the essential tasks were the only way to start. But eventually, you came to a point where you really required concentrating on the production aspects of your business and hiring others to attend to the details. Recognizing when this point occurs is the first great challenge for the entrepreneur. Many will pass it by, believing that the way to keep track of their company is by doing all the counting themselves. This is a great trap to which almost everyone is at risk. Do not feel bad if it happened to you, just rectify it!

Accounting Assistant’s Duties

Then, when you have made this decision, you must decide between hiring an employee to keep the books and subcontracting the work to an accounting or bookkeeping company. Let’s first see what the accounting assistant expects. This can include a few or all of the following:

  • Keep an up-to-date and correct record of all financial transactions of the company in journals and ledger or on a computer system.
  • Periodically, usually, monthly, they balance books and prepare financial statements and other organization reports.
  • Receive a register, deposit cash and pay the company’s invoices. The balance bank statements daily, investigating and correcting any discrepancy.
  • Calculate the payroll and issue payroll checks. You can monitor this function with a third-party payroll company.
  • Maintain inventory records and analyze product costs.
  • Purchase of supplies
  • Prepare purchase orders

In addition, you may want somebody to schedule, submit invoices, classify documents, complete in the switchboard and other duties that require someone in the company. You must take this into consideration.

Hire an Employee

The type of work described above can be called various things in various companies. Several typical titles are accounting, accounts payable or dependent receivable or billing clerk. To maintain consistency, we will call it an accounting or bookkeeping assistant. To hire an experienced bookkeeper for your company, you can expect to pay between $15 and $25 hourly, just depending on the experience. Add to this the extra costs of employees: paid vacations, sick leave, bonuses, insurance, retirement, benefit-sharing plans, etc. You will possibly find somebody who needs to work 40 hours a week more easily than a part-time worker, but that is not impossible. In any case, you will be blocked from paying a certain minimum amount of hours, regardless of the amount of work that actually exists.

Outsource

However, you can outsource your regular accounting duties. There are several cost-saving benefits to take this route. It will not pay the expenses of the employer’s payroll tax, employee advantages, and liability insurance. These costs, of course, will be incorporated into the consultant’s rate, so it is a wash at best. However, you still save money, as you have no recruitment costs and interviews or training costs. If you are not satisfied with the service, there will be no extra recruiting, interviewing and training costs to replace your assistant. You will not have to worry about employee demands. You can free an outsourced bookkeeping assistant without increasing your unemployment rates.

Summary

Always keep in mind, “You get what you pay for”. If you decide to hire or outsource, the bookkeeping records are the core of your firm. Your business will have a hard time succeeding without excellent bookkeeping.

5 Tips for Brilliant Bookkeeping

Whether it’s your goal to grow a thriving business, it’s essential to truly have a safe pair of hands handling the accounts. Inaccurate bookkeeping could harm your business and may also lead to severe penalties – but having strong financial statements can save you in many various ways.

The bookkeeper’s job is to keep rigorous accounts of all financial transactions – everything the business sells, buys, owes and is owed. This is vital, and not just because you need accurate annual financial statements. Good bookkeeping can also assistance with a lot more exciting, forward-planning side of things – because knowing days gone by makes it much easier to predict the near future.

Here are some of the main element things a good bookkeeper should do.

Keep the business and personal finances apart

If you are a sole trader you aren’t legally obliged to have a separate business bank account – but you should have one nevertheless. Otherwise your books will be a nightmare to keep, if you don’t record every penny of personal spending too.

If your business is a restricted company, it is another legal entity from you, so its money is not yours to spend (except on business expenses).

Keep clear and separate records

Bookkeeping typically requires at least three ‘books’ (i.e. financial records): the cash book, sales invoices, and buy invoices.

Your money book records everything passing in and from the business’s bank-account. This record of cash flow makes it an invaluable planning tool, as you can make use of it to underpin forecasts.

Your sales invoice file keeps an archive of all of your sales. Keep unpaid invoices together in a separate section. Your purchase invoice file should record all purchases chronologically, see more at this site: bookkeeperco.com.au.

Control your credit

A full sales ledger is a lovely thing, but if your customers haven’t paid yet, that beauty is merely skin-deep. Set strict deadlines for your customers to pay their bills for you, and consider blacklisting repeat offenders if you believe they are really taking advantage. Chase every late payment, as each is actually an interest-free loan. Without rigorous credit control, a tiny business can quickly develop a cash-flow crisis. 

Track expenses

Business expenses can be claimed against tax, so tracking them is vital for cutting overheard and maintaining healthy cash flow. Use a business bank card where possible and keep careful records of all other expenses, categorizing them by business activity.

The bookkeeper will categorize of expenses can prove especially important if your business happens to be audited. Numbers on tax returns are frequently estimates so it really helps to have the ability to provide supporting evidence for these.

Plan ahead

One of the better reasons to keep track of where you’ve been is the fact it helps you work out where you’re going. Looking at days gone by year’s books, you can usually spot the days when a bit more forward planning could have saved you money and stress.

Identify the major expenses of the year ahead and fix them in your business plan. Anticipate likely business costs (e.g. insurance costs or IT upgrades) but always give priority to your tax obligations – you will not have the ability to delay these. There could be occasions when your business seems awash with cash, and you could be tempted to obtain more than usual – having a complete roadmap of future expenses will warn you to be careful.

A bookkeeper can care for your bookkeeping as well as providing an array of other valuable services for your business. Seek out one locally using our smart search. Read more.