Why bookkeeping is essential for your small business

A bookkeeper deals with the organisation, the recording and the reporting of financial transactions of a small business. But most importantly, a bookkeeper clears the way for the accountant to work with your business strategically. #SmallBusiness

​As a small business owner, do you need a bookkeeper, an accountant, or both? Bookkeepers can seem a little mysterious. In fact, they deal with the organisation, the recording and the reporting of financial transactions of a small business.

Simply put, a bookkeeper clears the way for the accountant to work with your business strategically. This means: keeping track of daily transactions, sending and managing invoices, handling the accounts payable ledger, keeping an eye on cash flow, and preparing the books for the accountant.

Five ways that a bookkeeper can help your business

1. Concentrate on your business strategy

• Bookkeeping involves tracking the fine detail and recording it in accounts software. Working with these numbers can sometimes make it hard to see the big picture. So it's often better to have someone else do this work.

2. Reduce your accounting costs

• It can save you a lot of money by having a bookkeeper manage your daily transactions and run your monthly payroll.

3. Have an extra pair of eyes watching your cash flow

• If you want to avoid running out of money suddenly, you need to keep an eye on your cash flow. It helps to have someone else checking the numbers here, making sure your cash keeps flowing. 

4. Get quick access to vital figures

• Having an accountant manage your monthly business reconciliation and reporting is important. But what if you need some financial information part-way through the month? Bookkeepers can give you the information you need quickly, without you having to wait for your accountant to respond.

5. Keep control of your financial data

• Few small businesses can afford to hire their own accountant, so most accountants work on a part-time basis for their clients. If they use quality online accounting software to manage your financials, it makes collaboration much easier. Quality software means that your bookkeeper can work on the same set of data as the accountant. They can both work together to give you the best outcome and help your business grow.

When you’re hiring, make sure you ask whether a bookkeeper has an area of specialisation. Some bookkeepers may be able to help train staff in using online accounting or POS systems or give you advice on business processes.

Bottom line, bookkeeping is a vital job that helps your business run smoothly and also important to get useful insights into its financial health. Just as important, your business has a legal obligation to accurately record its accounts and file company reports to the tax office. Get in touch for a free consultation on how we can save you time and money in doing this right.

The following content was originally published by Xero in this article. We have updated some of it for our readers.