While bookkeeping is rarely the most enjoyable aspect of running a business, keeping accurate financial records is essential.
Trawling through data and transactions can feel time consuming and menial, while generating no direct revenue despite the significant time and effort invested.
For many business owners, outsourcing these responsibilities to an accountant hinges on the answer to one question.
Does the value of saved time and improvements in accuracy surpass the monthly cost of employing a professional?
Nevertheless, using a bookkeeping service may not be the smart choice for every business owner, as there are some important caveats to consider.
When should you do it yourself?
A smaller operation with straightforward accounts can likely handle its own bookkeeping.
Retaining responsibility of bookkeeping can not only save a smaller business money, but it can also allow business owners to maintain a closer oversight of their finances.
Plus, you stay in total control over the way your accounts are managed.
As an example, a sole trader with a handful of clients and minimal transactions could likely manage their own books, allocating a few hours each month using a cloud accounting software.
Likewise, where an operation is relatively new and yet to turnover substantial profit, handling bookkeeping in-house can keep overheads down, which can free up money that would be better invested elsewhere.
When should you hire a professional?
As a business grows, the admin responsibilities grow proportionally. Admin can arise because of more transactions, growing income streams, VAT registration and payroll responsibilities.
If any of the points below resonate with you, it could be time to bring an accountant on board to help with bookkeeping:
As larger businesses often have higher stakes when it comes to financial reporting, bookkeeping errors and poorly managed records can have consequences.
For example, incorrect tax returns and missed tax-deductible expenses can be financially costly for SMEs, shrinking margins even further.
In this instance, hiring an accountant for your books can help your business operate more cost-effectively, avoiding unnecessary stress and potentially costly penalties.
When it comes to filing end of year accounts and tax returns, bookkeepers can ensure there are no errors that could snowball into major problems.
Speak to an accountant
If you believe the precious hours spent bookkeeping could be better used elsewhere, it may be time to hire an accountant.
You don’t have to outsource all of your responsibilities, as some business owners manage day to day entries themselves while relying on accountants to review their records quarterly.
Alternatively, you may want to delegate some specific unwanted tasks, like VAT returns or payroll.
Our accountants provide full bookkeeping support to help keep your finances accurate and compliant, tailored to match your business needs and budget.
