Why hire a bookkeeper for new start-up businesses?
A bookkeeper gives a company a reliable measure of its performance. Bookkeepers also provide information to make general strategic decisions and offer a benchmark for a company’s revenue and income goals. In short, once a business is up and running, spending extra time and money on maintaining proper records is critical.
Since 2019 and the start of the pandemic, the number of start-up businesses grew to around 30%; that’s an estimated 770,000 new businesses created in 2020 in the UK alone!
One of the biggest challenges to new businesses is planning in the areas of ineffective marketing and financial management. With an estimated 150 million start-ups worldwide today, and up to 50 million launching every year, keeping an eye on the figures can be a matter of life or death for new companies.
If you ask any financial business support team, one of the first pieces of advice for new start-ups is to implement a good bookkeeping system. In fact, this key tip is essential for any small business and something that should not be overlooked when you’re working on a business plan. Not investing enough time and resources on business expenses could prevent your company from reaching its full potential.
Why should new businesses use a bookkeeper?
With the myriad of challenges facing new businesses and a whirlwind of competition waiting to take your place, why spend valuable time with your head in the books? You could be adding more value to your company by working on an area that will raise your business to another level. If you haven’t done so already, this might be the time to steer the ship out of the storm that’s potentially on the horizon.
Imagine the scenario where you’re fortunate enough to have your business growing at such a fast rate, so much so that you begin struggling to keep track of your accounts. You have one of the biggest events to plan, but you’ve fallen behind with the deadline to submit your tax returns for year-end. In this scenario, it would make sense to have had the foresight to have a bookkeeper on board. If you want to keep your accounts in check and remain in the game as a business owner, a bookkeeper may be essential to your company.
Why is bookkeeping important for new businesses?
Most businesses need a bookkeeper, but many small start-ups tend to tackle bookkeeping on their own. Bookkeeping isn’t necessarily the tedious task it once was thought of back in the days where we imagine a mountain of paperwork piled high, but what start-ups don’t take into account is that it’s not as easy as they think, particularly when time is of the essence. It’s common knowledge that tax return season is one of the most stressful times for business owners and it’s around this time that most new start-ups often regret not taking bookkeeping seriously.
What bookkeepers afford you is a full and clear account of your company’s finances in real-time. They properly organise your accounts so that you have not only a smooth transition dealing with the laws and regulations of running a business, but hiring a good bookkeeper will also give you an accurate snapshot of the health of your company, so you can quickly implement any critical changes necessary for a full recovery.
A bookkeeper is responsible for checking on your company’s budget, keeping your tax records up to date, and basically being on top of what’s happening financially in your business. All this will make it easier for you to control your budgeting and strategize for the future of the company. Picture it like this: it is useful for you to have a bookkeeper managing the stern, while you hold up the bow.
Undoubtingly, hiring a bookkeeper offers the CEO of a company the peace of mind to concentrate on what will drive the business forward and make the company stand out from the crowd. The benefits of appointing a bookkeeper seem to be worth more than making the decision to go it alone.
You could view a bookkeeper like an anesthesiologist who keeps an eye on the sleeping patient whilst the surgeon does his work. You too could have a bookkeeper who keeps the pulse of your financial management ticking, whilst you continue to run and expand your business.
What should you consider when looking for a bookkeeper?
What are the benefits of having a bookkeeper on your payroll? And what do you need to keep in mind when searching for a bookkeeper?
A dedicated bookkeeper will handle all the functions of your business accounts, including providing regular financial updates and profit and loss statements. Having a bookkeeper can be the link to offering you more confidence to grow your business at the right pace. A good bookkeeper’s services provide clear information about a company’s financial security and will guide the company on a path to better ensure business success.
To get a real sense of what’s happening in your company, a bookkeeper will need to be responsible for providing accurate financial information about your business. Maintaining accurate and up to date records helps you understand:
- Your income and revenue.
- Your expenses.
- Which sectors of your business are making a profit.
- Which sectors of your business are losing money.
How to find a good bookkeeper?
Luckily there are a lot of qualified bookkeepers out there so selecting the right one shouldn’t be difficult. Finding a trustworthy individual or a company to handle your books, as well as someone who you can work closely alongside is crucial. Trusting in and relating to your bookkeeper is not only great for the bricks and mortar of the business, but it’s also good for building a solid foundation for your company’s future needs. This strong relationship will help keep your business afloat, when others may be sinking.
When you’re thinking about whether or not to appoint a bookkeeper, what do you need to consider?
- Firstly, how many employees do you have and what is your current annual revenue?
This will help you decide whether you need a full-time, in-house bookkeeper, or do you have the flexibility to look at other options?
- Secondly, what other options do you have?
You could perhaps go with a freelancer who normally has more work flexibility and who charges a less expensive rate than a large firm or an in-house bookkeeper.
Word of mouth
There are many ways to find a bookkeeper and as mentioned earlier, finding someone you trust to work alongside you and your company is key. Word of mouth is one of the best ways to begin. Why not start by asking your friends and family or other business owners that you know?
At the click of a button you will find a wealth of adverts for bookkeepers, so how do you wave through this sea of potential hires? And what are the factors to consider when deciding on the right bookkeeper for you?
If you already know an accounting firm that you trust, ask the firm if it has a bookkeeping service within its organisation, or if it can offer any recommendations.
One of the most common ways to find a bookkeeper is to do a quick online search. For example, how do I find a bookkeeper? Welink!!! Welink Accountants will connect you with a bookkeeper quickly when you select your location and the professional you need. To get started, click here.
What’s the added value to your business?
While the cost of a bookkeeper varies depending not just on the size of your business and your individual requirements, but also on the experience and size of the organisation you decide to hire, remember to shop around for the best value to suit your budget. The figures start from around £30 an hour upwards and can be considerably more.
Other questions you may be asking yourself include, do I try the DIY method to save money in the short term? Should I wait until I hit the higher threshold of taxable income?
Remember this! Saving money at the beginning by not hiring a bookkeeper may cost you more in the long run when your business grows and your financial books haven’t been managed well due to lack of time. The scenarios are endless, so be sure to weigh your options well to give your company the best possible foot forward and to set it up for success from the beginning.