Are you spending too much time on your accounts and not enough on sales? Steven drew at the Association of Accounting Technicians has some good advice...
A strong bookkeeping system is critical to the success of any business
Bookkeeper or computerised skills – who should a small business call on to help with their accounting?
Automation is the future. That’s what we are repeatedly being told – whatever industry you are working in, beware the robot that is forming an ever-increasing spectre over your job, soon to complete its relentless swoop in and leave employees on the scrapheap.
But at the same time, the death of the human worker remains greatly over-exaggerated, at least for now. A survey conducted by AAT (Association of Accounting Technicians) among its licenced members showed that while one in two (48%) believe that the technology revolution is already having a major impact on the nature of accounting roles, a similar number (46%) suggested that automation should be viewed as an opportunity and not a threat.
Working with technology to provide solutions in certain areas of their company is something that the vast majority of small businesses will need to implement, if they haven’t already. The opportunities that machines can bring to help transform SME operations are potentially endless, removing complex and often monotonous administrative and marketing tasks to allow the owner to focus on more stimulating and exciting business-building jobs.
Finding a human solution for your business records
But where is it ok to fully outsource a task to artificial intelligence, and where does the human touch still need to be applied for quality assurance? Take the area of keeping business records as an example. Staying on top of business income and expenditure will help keep SME owners in control of their finances, but it won’t necessarily be the best use of your time or indeed meet your skillset.
Yet having a strong bookkeeping system is critical to the success of any business, and so if you have never the time nor inclination to keep the books yourself, a support system is required. Having an adequate system in place will help in many areas, including knowing when to pay suppliers, who owes you money, reviewing the cash flow of the business, preparing forecasts and forecasting future projections.
If you choose to outsource these services to a professional accountant or bookkeeper, they will be able to process your books and records on a regular basis, often working on your premises. They will be able to provide solutions to any complex accounting and tax planning you may have, as well as provide up-to-date information about government regulation and how this may affect your business.
Bookkeepers can analyse your wider financial situation and help you with a strategy for the future. They will also help process information relating to new employees to see they are added to payroll, as well as other day-to-day tasks to help record and input information correctly.
Turning to the machine
Depending on the complexity of your finances, software could well provide you with the answer.
Accounting solutions can help with basic tasks including producing financial reports, budgets and recording your total income and expenditure. It can also prepare invoices, complete tax returns, help you control your stock levels through tracking sales, and process payroll by recording timesheet information and calculate salaries.
There’s a variety of accounting software providers out there, who range from offering basic to complex solutions, which impacts upon their price. Perhaps the two most popular for mal businesses are Sage and Xero.
But remember that even the very best accounting software needs regular checking and can make mistakes, especially when it comes to either human error from inputting information or through not reacting to updated regulation. Generally speaking, your business may be fine operating from software for simple ongoing tasks, but the larger your company grows, or if you have particular situations arise (including complicated tax returns to complete), the human touch from a qualified bookkeeper may be required.
From the experts
David Mollard is a self-employed licenced bookkeeper based in Northallerton in North Yorkshire. He studied the AAT’s bookkeeping and computerised accounts courses prior to setting up his own business.
David says: “Irrespective of whether a small business undertakes their own accounting or employs professional services from elsewhere, every small business should be able to keep simple records. For me that starts with not keeping receipts in a bag – and also keeping a simple diary or log of sales purchases and business activities.
“As part of the business set up, every business will need to have a financial record system. There are many basic accounting packages available to buy or subscribe to that will help to track sales, expenditures and provide reports at the press of a button, but you’ll also need to have the skills in place within your business to understand the figures they produce, and what implications these may have for the company. This is where a bookkeeper can come in useful.”
Henry Cooper runs BirchCooper Accounting Services Ltd, a small business based in Buckingham. He recognises that there are going to be times where, as a small business owner, workloads will add up and having the right expertise in place will allow you to run your finances without it taking over your whole business.
Henry says: “Many small businesses fail because of their poor financial record keeping, and not having the skills to recognise the signs that things might be going wrong. It will always be useful to have a qualified financial expert that you can contact.
“When I started my own business, I tried to do everything myself, and there came a point when I needed to seek advice and support from others. If you’re spending around eight hours of a 40 hour working week doing your accounts, you might want to consider if that’s the best use of your time when you could be getting more business in. So you might also wish to consider where professional support can help you along the way.”
Steven Drew, Head of Markets and Products, AAT