In a recent post, we looked at the vital role relevant and timely bookkeeping can play in a business.

The thought of sitting down to tackle the bookkeeping can prompt anything from mild annoyance to outright dread! Business owners worry about making mistakes, and that fear, added to the sheer volume of other tasks on the ‘to do’ list can consistently push the bookkeeping to the bottom. 

Delegating what is actually a critical task can liberate business owners, allowing them to focus on what they do best and give them better information about their business at the same time. 

Here’s why and how…

Why does bookkeeping get left with the Business Owner?

Many business owners are reluctant to delegate their bookkeeping for a variety reasons. 

• Some may feel wary about trusting someone else with their sensitive financial information. 
• Others might think that, as the business owner, they need to handle everything themselves to ensure it’s done right. 
• The upfront cost (and challenge) of hiring a bookkeeper can seem daunting compared to the perceived savings of doing it themselves. 

These hurdles often obscure the true benefits of delegation.

The importance of regular, professional bookkeeping

Accurate and timely bookkeeping is essential for several reasons:

– Compliance: Ensuring all financial activities are recorded correctly to meet legal standards.

– Financial Insight: Providing clear visibility into the financial health of the business, allowing for informed decision-making.

– Strategic Planning: Enabling effective budgeting and financial planning based on accurate historical data.

Delaying or inaccurately handling bookkeeping can lead to severe consequences, including financial discrepancies, compliance issues, and missed opportunities for growth.

Opportunity costs and efficiency gains

One of the most compelling reasons to delegate bookkeeping lies in the concept of opportunity cost. 

When business owners spend time on tasks outside their primary areas of expertise, they’re not just spending time; they’re sacrificing the revenue they could have generated by focusing on what they do best. 

An experienced bookkeeper not only completes the task faster but also with a level of precision that comes from specialised knowledge and experience. As an example, the inconsistencies that we see in owner completed bookkeeping largely disappears, so immediately the outputs are more accurate and useful.

Professional bookkeepers also bring efficiencies through:

– Expertise: Familiarity with accounting principles and tax regulations.

– Technology: Knowledge of the latest financial software and tools that can automate and streamline financial processes.

– Scalability: Ability to manage fluctuating volumes of financial transactions without sacrificing quality or compliance.

Comparing internal vs. external bookkeeping options

When considering how to delegate bookkeeping, business owners have two main options: hiring an internal employee or outsourcing to an external bookkeeper. 

Each option has its benefits:

– Internal Bookkeeper:

  – Integration: Easily integrates into company culture and understands the specific nuances of the business.

  – Accessibility: Readily available to address immediate concerns or questions regarding financial matters.

– External Bookkeeper:

  – Cost-Effectiveness: Often more affordable than a full-time employee, especially for small businesses that do not require full-time financial management.

  – Diverse Experience: Brings a breadth of knowledge from working with multiple clients across various industries.

  – Flexibility: Scalable service that can adjust to the company’s growing needs.

Additional benefits of delegating bookkeeping

Outsourcing bookkeeping can also lead to broader organisational benefits, such as improved risk management and fraud detection. External bookkeepers maintain neutrality and objectivity, which is crucial in identifying discrepancies and ensuring that the financial data presented reflects the true state of the business.

Conclusion

Delegating bookkeeping responsibilities enables business owners to reclaim valuable time and head space, which can be better spent on pursuing business growth and improvement strategies. 

Whether choosing an internal employee or an external contractor, the decision to delegate bookkeeping is a strategic investment in the business’s efficiency, compliance, and overall success.

By understanding the true value of professional bookkeeping, business owners can make an informed decision that aligns with their operational needs and long-term goals.

How we can help…

We don’t provide bookkeeping services, so this article isn’t a sales pitch! We do however have some bookkeepers that we’ve known for many years who work on behalf of existing clients and that we can introduce you to if you need help.

If you’d rather find a bookkeeper yourself, we’d strongly recommend that you start with the directory listings on the industry websites. These are people who have trained and qualified, so should be able to offer you a quality service. As with Accountants, there is no restriction on the use of the term ‘Bookkeeper’, so anyone can trade under the term, and you don’t want to pay the price later for inadequate research now.

If you’d like to chat about the characteristics to look for, please get in touch. There may be a learning curve for both parties to get the processes running perfectly, but once you’ve got through that, you won’t look back!