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When does a Business need a Bookkeeper?

Updated: Apr 14, 2022

It depends on your personal expertise when it comes to business finance, and how much time you have available.

The great news is that there now exists many user friendly bookkeeping software packages that allow even novice business owners to effectively (and easily) track and manage their own finances.

In my experience, Xero is the best of the bunch.

They are so much better than trying to track everything on spreadsheets because it’s quicker, there’s no double-entry, and they collate, process and report on all the relevant data for you at the click of a button.

So, assuming you’re fairly computer-savvy and relatively organised when it comes to paperwork, you should have no issues managing your bookkeeping yourself until you become so busy that it makes sense to hire someone to take the load off.

Of course, submitting your annual company tax returns, confirmation statement, and CT600 are processes that are a little more involved and extremely important to get right! Unless you are familiar with this process I would strongly recommend hiring an accountant to complete these tasks for you - BUT! Make sure you hire a good one, because YOU are still personally liable for all the work they do on your behalf.

That’s right - if they mess something up, it’ll be your head on the chopping block, not theirs. So choose wisely.

Now, if you’re not very organised and/or not very tech-literate, I would advise paying an accountancy firm a monthly retainer to handle your bookkeeping for you. If you don’t, and you throw a box of receipts, invoices and other miscellaneous paperwork at your accountant come year end it will cost a fortune for them to sort through the chaos. In this case, it’s much better to pass everything along to your accountant in real time and have them be responsible for the daily administration of your company’s bookkeeping.

In conclusion, this is not a question that can be answered in units of time - instead, it largely depends on your personal circumstances, level of education, your personality traits, and the speed at which your business scales.

It’s important to be honest with yourself about your weaknesses and lack of knowledge, and hire in help where there are gaps in what you know. Financial management is the life-blood of any successful business, and having an eye on the numbers (and the right numbers) is critical to on-going success.

If your business is a car, then the financial data is your GPS! It’s what tells you ahead of time what delays or challenges lie ahead, and it helps you course correct early enough that those challenges can either be mitigated or avoided altogether.

Remember this simple rule - turn your actions into numbers, then turn those numbers back into actions that will keep you moving forward.

When was the last time you took your business for a health check? Take our FREE 2-minute 'Business Health Check' scorecard now to find out how healthy (or not!) your business is - just answer a few simple yes/no questions and we'll deliver your FREE Business Health Check Scorecard directly to your inbox along with tips and advice on how to improve!

Contact us now to find out how we work with small business owners to help you create a financially resilient business model, and turn those numbers into meaningful actions that will help you avoid costly mistakes and achieve your business goals!

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