Honestly… It’s complicated! The short answer is we make your numbers behave. We get your accounts neat and tidy (and compliant… yawn) so that HMRC/your bank/your partner are happy and you can run your business with all the information you need at your fingertips. With great financial information, you can make great decisions and really focus on what’s important… growing your business.
Don’t snigger. I see that smirk on your face.
It’s not what you think.
I’m talking about bookkeeping. Yeah, not so interesting now, is it?
Put simply, double-entry bookkeeping is a method where every transaction has two entries in the accounts.
Just like life, in accountancy, everything we do has an opposite.
Yin needs a Yang.
The Dark Side needs Jedi.
Thrash Metal needs K-Pop.
(You might say it needs to be well balanced… see what I did there?)
In reality, we rarely have to actually do two entries… we have fancy software to do that. But when things go wonky, that’s when you need to be able to understand the principles used within the software so you can fix things and get it all back on the straight and narrow.
Just a word of caution, though make sure you add “bookkeeping” or “accounting” to your search if you’re gonna Google double entry…
Only producing your accounts when the tax man knocks on the door? You’re missing out, my friend!
There’s so much value in your numbers. It’s all sitting there waiting to be unlocked by some helpful number geek.
Don’t just wait until your accountant knocks on your door before you pull together that pile of crumpled, faded receipts.
There’s so much you can tell just by looking at financial accounts.
Whether a company is managing their debts.
Are they getting paid on time?
Did they invest in capital or bulk buy stock?
What’s the best bottle to put on the boss’ desk if you want to get a pay rise*?
By comparing key metrics within the accounts, we can build up a picture of the health of a business and how it’s trading.
And that, in turn, can help to make decisions.
Forecasting isn’t possible without a bit of history behind you. You don’t know where you’re going until you know where you’ve been, right?
So if you’re not using your accounts to help you plan for the growth of your business, you may as well sit in the backseat next time you go for a drive because you’ll be just as successful.
*OK, that one might be a bit of a stretch
We’re often very British when it comes to chasing payments.
Ahem. Excuse me. You seem to owe me several thousand pounds. Would you erm. Maybe. Possibly. Send some cash?
Because they’re our clients. We value them. We don’t want to damage the relationship.
Well, there are a few possible situations here.
Either they value you too, or they’ve just genuinely overlooked your payment, in which case chasing them will result in apologies and you getting your cash. The relationship is intact, and you live happily ever after.
Maybe they can’t pay you. In which case, you can open the door to figure out if they could pay some of it. If you could reduce your services so they could pay less. The relationship is strengthened by your supportive attitude, and you live happily ever after.
Or they don’t value you at all in. They don’t care about the relationship you have, so they don’t care about paying your bills. In which case, you can avoid doing more work and racking up more debt and focus on the clients who actually give a damn.
Whichever way it works, credit control doesn’t have to be awkward.
You can be direct without being mean.
And sending statements is a great way to remind people that they owe you money without shouting in their faces.
Give it a try. You might just get paid.
Groundhog day.
Some days that’s what it feels like, right?
Get up, coffee, shower (and other appropriate sh* words), commute, work, commute, sleep, repeat.
Sometimes you just wanna break that cycle.
Well… if you’re doing your bookkeeping, please resist that urge.
The best thing you can do in accountancy is to keep doing the same things in the same way on a regular basis.
Good bookkeeping is all about consistency. Even if what you’re doing might not be exactly right, it’s much easier to fix if you do the same thing every time.
Make your choices obvious – if you want to have loads of account codes to split your expenses into, then you go for your life. It’s way better than having thousands of pounds stuck into “Sundry” or “General Expenses”.
If there’s one thing most bookkeepers would love to banish, it’s the dreaded generic account code.
And do your best to make life simple. Make it easy to keep your receipts tidy by building it into your routine. Have a box, folder or drawer in the same place you put your keys when you get in. That way, it’s built into your habits.
Use rules, tech (or even a real-life admin person!) to keep your inbox tidy and file away the bills that come in.
Keep a separate bank account for your business, so you’re not wading through personal expenses trying to figure out if that £10 at Tesco was that paper you bought or a bunch of flowers for Auntie Mildred*
But the easiest way to keep it all under control?
What is the simplest method to ensure you’re always up-to-date and accurate?
Hire a bookkeeper, of course!
*I know. Mildred, that was only one time, and she didn’t appreciate it, so she gets the cheap bunch now. But you get my point.
Where have all the hours gone?
There are supposed to be 24, but you’re convinced that after you’ve cleared your inbox, put out some fires, done your marketing and chased clients for payment, along with actually doing the thing your clients pay you for (or not as the case may be), you seem to have none left?
How the hell are you supposed to get your finance admin done as well?
Such is the lot of the small business owners. We have to wear so many hats that eventually, one (or two, or three) come crashing down and get left behind.
And it’s usually the bookkeeping. Because nobody is shouting about that until January, so it can wait, sound familiar?
Now I’m not saying I’m gonna shout at you. That wouldn’t be nice.
But I can definitely take that hat away, so it’s one less thing to try and balance while you walk that tightrope that is entrepreneurship.
And you never know; you might actually find something useful in those numbers that can help with some of the other things as well.
Have you got piles?
Cheeky!
I mean on your desk.
Is the number of unread items in your inbox longer than your phone number? Are you afraid to answer the phone when your accountant rings?
Then you need a stiff drink?
Chocolate?
Yeah, they’ll help a bit, but you need a longer-term solution.
You need a bookkeeper!
Things were going just fine. You’re smashing this business owner thing.
Turnover has gone through the roof. New customers walking through the (metaphorical) door every minute.
This is the dream!
And you’re all over your admin, like a boss. Bookkeeping?
Completed it, mate.
Then up pops your accountant.
“You need to register for VAT.”
Hmmm? Say what now?
Now you’re super busy, and you need to learn something new.
Ain’t nobody got time for that!
Why don’t all of these receipts have VAT on them?
Am I OK to put this through anyway?
Who are you gonna call?
Not Ghostbusters.
Don’t be silly.
You need a bookkeeper, not a proton pack. I don’t care if bustin’ makes you feel good.
It’s awesome when you hand control of your numbers over to a bookkeeper. You get peace of mind and all that free time back.
But did you ever think of the other benefits that it brings?
Nah, probably not.
Everyone can put a few numbers into Excel, right?
And these new online accounting programmes are designed for business owners to do it themselves. They do it all for you. The adverts say so.
And, of course, it’s not really a skilled job. It’s just data entry, really.
Or not…
Some simple businesses are fine for a DIY job. We all need to start somewhere, and cash is tight when you’re just starting out. So here are a few flags to help you spot when the time might be coming to search for a number geek of your own…
• You’re busy, and you’re falling behind on your admin
• You become VAT registered – all of a sudden, your workload gets a bit bigger
• Your accountant is always asking questions that you don’t understand/can’t answer
• You start using third-party payment providers
• You notice that the balance in your software never actually matches what’s in the bank
• You don’t understand where all your money has gone
• You need funding, and they’re asking for reports and forecasts
If you’ve read that list and feel like you can relate, why not book a free fifteen-minute chat to see how we can help?
No, that’s not the start of a really crap joke.
It’s a genuine question that I get asked a lot.
And it’s a really hard one to answer.
Generally, bookkeepers start at the bottom of the process. We get all the threads that generate income or costs in your business, and we weave them together into your accounts.
Accountants tend to work the other way around. They start with the finished accounts and tidy it up to keep the tax man happy.
But in reality, there’s a lot of overlap.
There are bookkeepers who do the whole accountancy thing too. And accountants that don’t do tax but prefer the more analytical side of things.
And then there are read-headed number geeks like myself, who are qualified accountants who would rather spend their days doing bookkeeping… with the added bonus of knowing exactly what accountants need. Which takes away the stress of handing stuff over.
I’m like a secret agent. Shhh… don’t tell any accountants that I’m working for the other side…
Honestly… get both.
Us bookkeepers are better for managing your everyday finances. We will look after all the documents that go into creating your accounts. We keep it all up-to-date and tidy. And not only that, you don’t need to worry about finding the time to do it all. A good bookkeeper will make it as simple for you as possible to get your accounts sorted. This frees you up to do the actual making money thing that you set up your business for in the first place.
We also know our way around a lot of different business types. We’ll get to know exactly how yours works so we can be confident that you’re putting through all the expenses you can and none of the ones you can’t.
So if time or confidence in your accuracy are your issues, a bookkeeper is an excellent place to start. And we work alongside a lot of different accountants, so we’ll be able to help you find someone to do the HMRC-y tax-y stuff as well when the time comes.
Looking for help with your self-assessment but don’t know where to turn?
Worried that an accountant will be too expensive (or just too damn intimidating)?
The good news! The answer is yes; bookkeepers can submit tax returns. In fact, anyone can submit tax returns.
Confused? You will be! Lol!
The important thing to look out for is how qualified your chosen number geek is, whether that’s bookkeeper or accountant.
It’s an unregulated profession, so feel free to ask for evidence of qualifications. For example, well-balanced, Jen qualified under AAT (Association of Accounting Technicians) Level 4, which means she’s qualified to do tax returns. She then went on to qualify as a CIMA (Chartered Institute of Management Accountants) member, so she’s double qualified to do tax returns.
There are loads out there, and any qualified professional should also do the following:
• Provide you with a contract or terms of engagement document to sign
• Take ID and proof of address from you for AML purposes
• Get authorisation via HMRC to act on your behalf as your agent
• Be insured
• Explain your tax bill to you and let you have full visibility of the documents and calculations
• Never ask for a cut if you get a refund
So there you have it!
Still need a hand? Here’s the link to book a free fifteen-minute chat to see how we can help.
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