Bookkeeping is the process that keeps a business’s financial records accurate. It keeps you organised, ready for BAS and tax time, and able to budget with real numbers. Many small business owners are multi-tasking masters who do their own bookkeeping instead of outsourcing it.
But think of a month when you don’t have to attend to any back-office work. You could focus more on running and growing your business, and rely on people with deeper bookkeeping knowledge to keep the records right. Here are the key benefits of bookkeeping services for small and growing businesses, starting with what bookkeeping covers.
What is bookkeeping?
Bookkeeping is the process of recording and organising financial transactions. It is the foundation of accounting, covering the day-to-day recording of sales, purchases, GST, loans, payroll, operating expenses and other transactions.
Accounting then analyses and reports on the data that bookkeeping collects. Accurate records let business owners know their financial position and spot problems early, before they grow. How well your bookkeeping is done determines the accuracy of everything built on it, so it is worth having it done by someone qualified.
The benefits of bookkeeping services for small business
Outsourcing bookkeeping helps you organise and analyse your financial information so you can judge the financial health of your business with confidence. There are other reasons it matters too.
The Australian Taxation Office (ATO) expects businesses to keep records that explain all their income and expenses, generally for 5 years, in English or in a form easily converted to English. Without accurate bookkeeping, reporting the right information to the ATO becomes difficult. Here is how bookkeeping services help small businesses.
Makes you prepared for tax time
Most businesses have BAS and tax returns to lodge, and the deadlines are firm. With a bookkeeping process in place, your financial information is ready on time, so you aren’t scrambling for receipts and invoices at the last minute. A bookkeeper who prepares or lodges your BAS for a fee must be a registered BAS or tax agent (or work under the supervision of one); your tax agent then prepares the tax return from clean records.
Enhances accurate budgeting
Outsourcing a bookkeeping service makes it easier to budget for the business accurately. With proper organisation of your income and expenses, it’s straightforward to review your costs and financial resources. A budget is the financial roadmap for your business, helping you plan for the year ahead.
Comparing your budget with your actual results is a reliable way to find cost savings or spot cash flow issues early. If your books are inaccurate, budgeting becomes guesswork.
Promotes better decision making
As a business person, you need to clearly understand your finances to plan your company’s future effectively. You may have to make significant decisions like opening a new location or hiring a new employee. To make such decisions with confidence, it’s critical to understand your company’s financial performance.
Accurate, up-to-date books show you where you stand. If the reports show cash running short, you can act early, for example by tightening collections, delaying spending or arranging finance.
Maintains organised records
Hunting for a crucial document at the last minute leads to missed deadlines and errors, and mistakes in your records can be costly. A bookkeeping service keeps your books up to date throughout the year and your records organised, so you can find what you need quickly.
It helps you focus on other business operations
If you decide to do bookkeeping on your own, you will spend much of your time paying invoices, processing payroll, and tracking expenses, leaving less time for everything else. A bookkeeping service lets you focus on what you do best: serving customers and growing the business.
Lower costs
An in-house bookkeeper means a salary, super, leave and training, plus cover when they are away. For many small businesses, a bookkeeping service costs less than a full-time hire, and you only pay for the work your business needs. Compare the full cost of each option before deciding.
Helps to avoid conflict of interest
It can be risky to entrust bookkeeping and accounting to one of the owners in partnership businesses. Misconduct accusations can potentially ruin the relationship even when a record-keeping error is unintentional. If something goes wrong, the other members might question the intentions of the person responsible.
An independent bookkeeping service separates record-keeping from the owners, which builds confidence that the records are complete and prepared without bias.
What to look for in a bookkeeping service
A bookkeeping service may be a sole practitioner or a team. Either way, choose one that knows your type of business and, ideally, your industry, and that specialises in businesses of your size.
Check that whoever prepares your BAS is registered on the Tax Practitioners Board’s public register, and ask what you will receive each month: reconciled accounts, a profit and loss statement, a balance sheet and commentary on what changed.
Get bookkeeping for your growing business with Visory
Visory runs bookkeeping, payroll, accounts payable and receivable for growing businesses, with a dedicated team and its AI, Delphi, overseen by that team. With Visory Insights, a Business Performance Partner walks you through a plain-English read of your numbers, monthly or quarterly. See pricing, or book a discovery call.
About this article
Written by The Visory Team. Published . General information for Australian businesses, not advice for your situation.
