01/08/2025
Yesterday I had the privilege of presenting to a networking group in Bendigo of talented, creative, innovative and eager business owners about some of the risks associated with blindly relying on bookkeepers to manage their books.
With 30 years of experience in managing risk within small and large businesses, unfortunately I had some real horror stories to share.
The key takeaways for the day were:
1. Consider a bookkeeper an investment, NOT an expense.
If you believe that the cost of a bookkeeper is just an expense, you are more likely to look for the cheaper options rather than the value and quality you need to ensure business sustainability and success.
2. Take the time to find a good bookkeeper that has a proven track record and the qualifications to match.
It's ok to engage a bookkeeper when they are referred by a friend, colleague or business contact. However, be sure to monitor them carefully over the first year of doing business to ensure they are a good fit for you. If they are not, don't hesitate to contact others and consider changing.
3. Be wary of cheap bookkeepers - you get what you pay for
a) if they are genuinely experienced and qualified, they have to pay for insurances, BAS registration and preferably a membership with the Institute of Certified Bookkeepers to ensure their qualifications and professional development is current and they are tied to the code of conduct for delivery of services.
b) Don't use friends or family without qualifications or experience unless you are prepared to regularly log into the financials and carefully monitor them yourself.
c) Trying to save money in the short term can literally cost you thousands in the mid-to-long term.
4. Insist on monthly Profit & Loss, Balance Sheet and Transaction Reports so you can check over the data entry.
Remember, in the end the business owner is the one responsible and accountable for their figures and you need to know they are being recorded correctly.
5. Ask your Bookkeeper to send you the ATO Transactions or account summaries each quarter so you know what your current status looks like. Otherwise, set up your own login for the ATO Portal and check the accounts yourself.
6. Have a quarterly meeting with your bookkeeper to discuss the relationship/service delivery as well as your financial situation. Work through questions like:
- What is working for you in the service delivery?
- What isn't working for you in the service delivery?
- Review your financial reports and discuss options for continual improvement.
7. Don't be the client that the bookkeeper and accountant have to chase for informaton all of the time! This is a waste of time and money for all of you.
8. Have established procedures between yourself and the bookkeeper that keep things simple and easy to follow.
For example: at Bizily each client is provided with a dedicated accounts email, and a dedicated folder to quickly forward or save source documents as soon as they receive them.
Naturally - They gave me some homework too! Lots of questions were raised in the discussion such as:
- What's the difference between an Accountant & a Bookkeeper?
- When should I move from a spreadsheet to a paid bookkeeping system?
- How do I split personal and business expenses within my bookkeeping package?
- Can I access the ATO Portal to check on my stuff even though the bookkeeper/accountant does it all for me?
- What do I do when something feels "off" about my bookkeeper - like not providing information when I ask, not responding, not communicating with us about our financial position?
- How do I choose an accounting software package that is right for me?
Over the coming weeks I will provide answers to all these questions and more, so be sure to follow my page so you don't miss any helpful guidance.
