There are many different sorts of bookkeeper or bookkeeping services open to you when you start a new business, and working out which will suit you as a business owner can be difficult ...
I used to see clients who had bookkeepers who were so secretive about what they did and they would never let anyone in the business near the bookkeeping software. They would be given the paperwork by the business owner and would process everything into the package, producing reports if the business owner needed them.
In these cases, often the business owner would keep excel spreadsheets with the data they need to make business decisions, and the bookkeeping package would just be used at the year-end to produce the annual accounts.
Imagine the scenario where you raise invoices for your business in Word or Excel to send to clients then give copies to your bookkeeper to record in your bookkeeping software, or even worse, store them up and give them to your accountant at the end of the quarter or the end of the year. Who then keeps track of which invoices are paid or outstanding?
A few years ago I picked up a new client who did just this in excel spreadsheets, while their accountant came to the office once a month and entered all the invoices and payments on the accounts package. This is an awful lot of repetition and double entry and risks mistakes being made. Using Word and Excel to invoice also means any statements sent out need to be produced from scratch every time rather than being produced at the touch of a, button.
Business owners, especially if you are just starting out and don't have staff yet, can be best served by having an accounts package that they can learn to produce invoices for themselves, and even mark payments against the invoices too!
You may feel more comfortable if you still get an outsourced bookkeeper to support you who can look after the purchases side and keep an eye on the accounts through the year to check everything is as it should be. I call this collaborative bookkeeping, and it can be a sliding scale on how much you get involved in your bookkeeping personally and how much you outsource to someone else.
This is why cloud packages have become so popular as you can give others access to the software to support you remotely if needed. Xero can be the best package for this sort of business.
For larger companies, a better solution is to give restricted access to the accounting software to the invoicing area or the suppliers invoicing (or bills) area and let admin or other staff produce the invoices or log the expenses and payments live on the system as and when they are made. You can prevent them from seeing the full bank accounts or sensitive areas like payroll and just give them access to the areas they need for their job.
This is much easier in Sage50 than Xero and would mean your bookkeeping system is always up to date and can tell you what you are owed and what you owe, and usually any management reports like a profit and loss or trial balance can be produced at any time so you can see if you are actually making any money. Companies with an office and staff running desktop software on a shared network can find this method of bookkeeping most advantageous.
I can either train staff or support outsourced bookkeepers to use the system so the accounts system becomes a tool used to run the business or help make business decisions rather than just being something the accountant uses to add up the figures for your tax returns at the end of the year.
So, what sort of bookkeeping system do you use and is it the best one possible for your business.
If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.