What Do Your Bookkeepers Do for you?

 

November 4th, 2013 saw the start of the first National Bookkeeping Week. It sparked a discussion of how the bookkeeping can make or mar a business. Done well, it can help you to grow and blossom. Done badly, it can cause your downfall.

The most important thing a good bookkeeper can do is to help you keep tabs on your cash flow and warn you if it’s not looking too good. One of the main reasons for poor cash flow is not receiving payments from your customers at the right time. And if you don’t get your invoices out, you can’t expect the payments to come in. 

Timely Invoicing

If you have outsourced bookkeepers who do your invoicing, you know the invoices will all be prepared and sent out as soon as possible, as long as you pass on the details of sales or work completed. They won’t be able to invoice what they don’t know about, so if that sometimes happens, you probably need a ten minute chat to devise a fail-safe procedure for getting the information to them.

Credit Checking

Getting new business is great – provided you can expect to be paid for it. If you’d like to do business with another company, it makes sense to check its credit rating before making a commitment. But that takes time you may not have. It’s another job your bookkeepers could do for you.

Payment Chasing

If payments don’t arrive on time, the first step will probably be a statement sent out as a reminder, which can be a routine activity performed by your bookkeepers. When you don’t get a response even after that, you probably need to follow up with a phone call. If you have to do it yourself, you might have to put it off for days or even weeks before the right moment arrives. A note about it could easily be buried and forgotten under a pile of other reminders of things you have to do. 

If you have your outsourced bookkeepers on side, you don’t have to worry about this. They could make calls for you, just passing back to you anything which needs a decision only you can make. And they can jog your memory to make sure the really important calls are not forgotten.

Giving you Peace of Mind

When all these important aspects are taken care of, your cash flow will be as good as it can get. There will be money to make your own payments on time, and keep suppliers and the tax man happy. Your bookkeepers will also make sure that you also have accurate financial records always at your fingertips. You can get on with running your business and keeping your customers happy.

The Problem of Business Inflation

It’s official. Business inflation is still more than twice as high as that for consumers. In 2013 it is running at over 6%. On a positive note, it is not quite as high as 6.7%, which was last year’s statistic. The news comes from a survey of members of the Forum of Private Businesses. It reported that costs had risen for a number of areas.

 

Energy Costs

 

Not surprisingly, the first was energy, the field where price rises have been dominating the news and the speeches of politicians. Despite all their efforts, everyone is facing these rising costs, and businesses which cannot operate without energy are being even harder hit than households.

 

If you feel you have been really unfairly treated by an energy provider, you may be able to complain to the Energy Ombudsman. This costs nothing but will only apply if you fall into the category of micro business, i.e. you don’t have more than 10 employees and your turnover doesn’t exceed £2 million. If you don’t quite fit that profile but your annual consumption of electricity is 55,000 kWh or less, and/or of gas is not more than 200,000 kWh, you could still be eligible. Other SMEs would need to take legal advice on whether it is worth pursuing a dispute with an energy company.

 

Transport Costs

 

These were listed next. Whether you or your employees have to travel by road, rail or air, the costs are rising. The recent announcement of another fuel duty freeze is welcome news, but the best way to cut these costs is to travel less. Video conferencing technology has come on in leaps and bounds, and a small investment in this could save you money on travelling to meetings in different parts of the country or even in other countries.

 

Marketing Costs

 

For a small business, it’s important to maintain awareness in the markets and to continually attract new customers. But marketing campaigns can be costly and not always bring the response you want. Your bookkeepers should be able to help you monitor that. You also have to be really careful that you have your targeting focus right and use social media and other cheaper means available to reach that audience.

 

Materials and Stock

 

Your suppliers will be feeling the pinch just as you are. Small businesses often have to pay over the odds for small deliveries of goods. One way to get around this problem is to join a consortium of local businesses, which can order in bulk and have much greater negotiating power. Ask your outsourced bookkeepers if they know of one that you can join. If not, with all their local contacts, they could be very helpful in getting one set up.

Small Business Aspects of the Autumn Statement

The Chancellor’s Autumn Statement wasn’t all doom and gloom. There is some heartening news for small businesses, despite his assurances of continuing austerity measures.
 

Changes in Business Rates 
 

The vexing question of rates for small businesses has been addressed, with small retailers reaping the most benefit. They will receive a £1000 discount in the next two years. A 50% discount has also been announced for anyone moving for trading purposes into a property that has been left vacant. The small business rate relief scheme is to continue beyond 2014, and you will be able to pay in 12 monthly instalments. All business rate rises will be capped at 2%. 
 

Checking the Rising Cost of Using Your Car 
 

Other areas helpful to the small business include the freezing of fuel duty again in 2014. And the Chancellor took the opportunity to emphasise that without this and his previous decisions not to increase the duty, petrol and diesel could be around 20p higher per litre. 
 

Young Persons’ National Insurance Contributions Scrapped 
 

The government wishes to encourage employers to recruit young people so, if you employ anyone under 21, from April 2015, there will be no national insurance contributions due for them. This has been criticised for making life harder for 21 year old job seekers, and for not encouraging young people to gain more skills before taking full time employment. It is, however, good news for workers who will be in the right age bracket, and it may slightly reduce the financial burden on employers, who will also be eligible for the £2,000 Employment Allowance that will come into effect in April 2014. 
 

Responding to Regulatory Change 
 

Every time regulatory changes are introduced, small business owners must take note and make the appropriate administrative changes. If you know that your outsourced bookkeepers can be trusted to deal with all of them, it can take a load off your mind. Without this kind of assistance a good part of a number of working days could be taken up with sorting out what adjustments you will have to make – time that could otherwise be usefully put to your core business activities and developing them further. 
 

Pretty well everything announced by the Chancellor has a future start date, and these dates can easily be missed when you are busy getting a firm foothold in the markets. That’s when having proactive outsourced bookkeepers can really pay dividends. You can get on with your everyday business life knowing that you won’t have any compliance issues and all your financial responsibilities will be taken care of at the right time.