Great bookkeepers are difficult to come by. Here is a quick list of things to watch out for.
Great bookkeepers take the time to do things right the first time.
Excellent bookkeepers move slowly. There are several ways to expedite bookkeeping, but they frequently have drawbacks. There are typically multiple ways to enter a transaction into accounting software, and each one has pros and cons. A good book-keeper is aware of which shortcuts actually save time and which ones may lead to problems in the future.
Great bookkeepers understand your business.
You can expect more from a professional book-keeper than just a bank account reconciliation. They will take the time to learn about your company, the reasons behind your decisions, and come up with better ways to carry out your current operations. They will also assist you in identifying any shortcomings and possible improvements.
Introverted sensors, ISTJs are known as the best personality type for accounting jobs, CFO positions, or careers as auditors. This type is loyal, hardworking, and understands the importance of their roles; but the real predictor of success here is their analytical nature that enables them to work quickly and precisely.
Excellent bookkeepers are curious.
You are aware of the statements concerning assumptions. Your book-keeper must frequently question you to comprehend your transactions and properly allocate your transactions. This could sometimes seem uncomfortable. It’s crucial to do this properly, as mistakes might have compliance and tax repercussions that your accountant could miss but that an audit would find.
Excellent bookkeepers are aware of their ignorance.
If a great bookkeeper is unsure whether they are entering transactions correctly, they won’t do it. They would rather admit their ignorance than make a bargain that could lead to trouble down the road. They’ll pause, seek up resources, get in touch with you, their colleagues, trade organisations, and possibly even your accountant. Their professionalism requires it.
Excellent bookkeepers are knowledgeable and up to date.
A skilled bookkeeper needs to be knowledgeable about a lot of law. Additionally, that law is always evolving. This information aids in your compliance, allowing you to rest easy knowing that those crucial details are being taken care of. Additionally, technology is having a significant impact on how small firms do their bookkeeping. A smart bookkeeper welcomes technological advancements and offers adjustments to your company that will make your operations more creative, successful, and consequently more cost-effective.
The conventional method of bookkeeping comprises having a book-keeper come to your office, sit in front of a computer, and enter data from paper files into desktop accounting software. This is the conventional method of bookkeeping. Data must be entered manually, one field at a time, into each field. Bank reconciliations are typically performed after the book-keeper has either obtained a paper statement from the bank or retrieved a list of transactions from your online banking platform. Both of these procedures are required in order to complete the bank reconciliation process.
Documents run the risk of being lost if they are taken away and not brought back, and it is necessary to file documentation and keep it for the required amount of time (between five and seven years). In order to accomplish these responsibilities, a significant amount of manual labour is required. This is something that your book-keeper will often undertake on a weekly, monthly, or quarterly basis. Reports such as a profit and loss statement and balance sheet are often not available for access until after these processing sessions have been finished.
The Pitfalls
Desktop software must have upgrades manually installed on each machine before it can be upgraded to the latest version when new software is released. The superannuation rates and tax tables need to be manually updated after the close of each fiscal year. Because an older version of the software will be unable to access a data file that has been upgraded to a newer version, this procedure will need to be performed on each and every computer that uses the software.
Many people are unaware that approximately one quarter of the typical annual accounting bill for companies is comprised of the fees that are expended by the external accountant in order to extract the data from your backed-up desktop accounting data file and convert it to a format that they can utilise. Accessing files with the right software version, having administrator credentials for unrestricted access, and having accurate copies of the data file may also be included in the price; however, these features are not the only ones included (and issues when entries are made in that particular period after the data file has been sent to the accountant).
The most up-to-date method of keeping books involves having your book-keeper work remotely using supplier bill processing software. This software scans PDF documents and uses optical character recognition to extract information such as the supplier name, invoice number, invoice date, amount, GST, and currency.
Your cloud accounting software is then updated with the data, along with a duplicate of the original document, so that the book-keeper does not have to manually enter it all. Instead, all that is required of them is a speedy check to ensure that the software has extracted the appropriate data. This suggests that there is no requirement for the usage of paper filing because the software will keep track of the bills for the suppliers. The original document may be stored safely, and a copy may be downloaded and printed as required.
The Benefits
There is significantly less labour required, and one can complete it on a daily basis in increments of fifteen minutes. Because your book-keeper is able to log in and do duties whenever they are called for, your data file will almost always be in a significantly more up-to-date state. As a consequence of this, reports such as your balance sheet and profit and loss statement may be generated far more frequently, which gives the owner of the company more and more frequent insight into the functioning of their company.
Because bank feeds immediately import the previous day’s transactions every morning, daily bank reconciliation is not only possible but also recommended. You don’t need to log into your online banking account in order to determine which of your customers paid you the previous day. You may do this on your own.
Because it runs in the cloud, your accounting software may be accessed from any device as long as it has an internet browser. You can use an iPad to create invoices that may be emailed directly to the customer in a matter of seconds. It is no longer necessary to carry out software upgrades because the application is now hosted in the cloud, much like Google Mail or Hotmail. This eliminates the requirement for users to regularly transfer their data. Additionally, tax tables and superannuation rates will be updated in an automated fashion.
The add-on options for the Xero accounting software are extremely flexible. This implies that data that is frequently redundant in another software programme like an Excel spreadsheet can be integrated to Xero, hence removing redundant data and duplication. For instance
You may integrate all of these solutions and more by using the accounting software Xero, which will result in significant back-end cost reductions for your company’s bookkeeping as well as its administrative expenses.
There is a book-keeper on every corner, but finding a decent one might be challenging. And once you do discover one, you must keep them close at all times. But how can you tell if your bookkeeper is competent, or even better, excellent?
Here is a useful tool to assist you in finding a local bookkeeper if you are unclear of where to begin your search.
But knowing what to search for is an entirely another challenge.
Before we examine what makes a great bookkeeper, let’s first discuss the qualities that any bookkeeper should possess.
Every bookkeeper ought to have professional training in accounting or bookkeeping, and ideally, they ought to be licenced as Business Activity Statements (BAS) agents.
If a bookkeeper is a registered BAS agent, it indicates that the Tax Practitioners Board has determined that the bookkeeper possesses the knowledge, training, and experience necessary to accurately account for GST and prepare your BAS in accordance with the law. To find out if your bookkeeper is registered, click on this link.
Like other professionals, a bookkeeper with less training and experience will typically be less expensive. However, selecting a bookkeeper based solely on price can be risky.
A highly skilled bookkeeper will always appear to be more expensive when comparing hourly rates alone. This is untrue because bookkeepers with the most experience typically operate far more quickly and intelligently than someone with less expertise.
This recently happened to one of my clients as an illustration. He paid his prior bookkeeper about half of what I charged, but she demanded that he pay her for 16 hours of labour each quarter. He came to me, and when I informed him our charges, he nearly fell over. Even though it took me four hours to do his task, he only had to pay for around half of what I charged.
Now, a professional bookkeeper might not be enough if you want to concentrate on growing your business instead of worrying about your bookkeeping.
You need and desire a top-notch bookkeeper. A good bookkeeper will do more than just help you meet compliance requirements. Here are five indicators that your bookkeeper is performing admirably.
To ensure that the processes are as effective and uncomplicated as possible and that nothing is overlooked or repeated, he or she will take the time to understand your company’s operations. They will be able to identify areas in your small business that can be more efficiently run.
Many business owners dislike being questioned. However, it is preferable for your bookkeeper to ask questions rather than make assumptions in order to guarantee that transactions are allocated accurately. A bookkeeper for one of my IT clients put computer purchases under “Computer Equipment” on the balance sheet rather than under “Cost of Goods Sold.” Until their accountant completed their tax return and inquired about all of their asset purchases—which weren’t—in order to claim tax deductions—they believed their profit statistics to be considerable for months. Only if she had questioned.
They are also aware of the legal limitations on their authority. BAS representatives cannot offer any advise regarding income tax or fringe benefit tax (FBT), for instance. However, they are also not ashamed to ask your accountant for guidance if they are unsure rather than being frightened of sounding foolish.
A smart bookkeeper will be knowledgeable about developments in technology, accounting, and bookkeeping. Due to developing technologies, the bookkeeping and accounting sectors have seen significant change in recent years.
Your bookkeeper should explain to you how to use technology to automate operations with cloud accounting software like MYOB Essentials or MYOB AccountRight in order to save time and money.
According to a recent poll, employing bank feeds—a service that connects your bank account to your accounting software—can help small business owners save an average of 10 hours per month. I believe that number to be on the low side and easily quadrupled after using bank feeds.
Last but not least, the bond between a client and a bookkeeper is revered. Most people are reluctant to divulge financial information to friends or even family. However, this person has access to everything, especially if you use one account for both personal and business purposes, but that is the subject of another essay.
Ensure that you enjoy working with your bookkeeper, that you have faith in them, and that you feel free to be entirely open with them. If you are not entirely honest with them, your book-keeper cannot assist you in getting the most out of your accounts.
How can you locate the ideal candidate for the position now that you have made the crucial decision to engage a bookkeeper for your company? What attributes should a great bookkeeper possess? We examine the top six qualities you should look for in a bookkeeper to help you choose the best person to handle your company’s finances.
Look for organisations that have a history of upholding integrity and can provide references from satisfied customers who are willing to speak candidly about the dependability, honesty, ethics, and effectiveness of their services. Never be afraid to question a book-keeper how they would approach a specific financial circumstance unique to your company.
You require a seasoned book-keeper who will prioritise and work for you. This entails respecting other people’s time, communicating proactively, and exhibiting your ability to comprehend your professional goals. You can choose the small company book-keeper most likely to assist you in reaching your financial objectives by looking at their customer service practises and client relationships.
A must-have skill is current software expertise. The amount of time spent on data entry can be decreased and many operations can be automated by bookkeepers who are experienced with online accounting software.
Cloud-based accounting software makes it easier for bookkeepers to keep records current and gives business owners the ability to see problems more immediately and take action to boost productivity and drive expansion.
The importance of your company’s income, expenses, assets, liabilities, and equity should be understood by any competent book-keeper, but they should also be able to:
The manual bookkeeping methods used in the past are insufficient in the digital age. Make sure the book-keeper you select is knowledgeable about the most recent advancements in cloud-based and accounting software.
A few professionals commit the sin of obtaining their credentials and moving on without looking back. While the majority of bookkeepers try to keep up with changing tax and business legislation that can impact your organisation, it shouldn’t stop there. To stay at the top of your industry and in front of the competition, choose a company whose abilities, commercial services, and technical innovation are constantly being enhanced.
You can’t just assume that all bookkeepers are detail-oriented perfectionists and natural organisers. These abilities are frequently learned via experience and are crucial for the effective interpretation, reporting, and retrieval of financial data, especially when dealing with various clients. Ask about review procedures and safety nets, and keep in mind that the more efficiently your bookkeeping processes are run, the better off your business will be in the long run.
A competent bookkeeper follows established procedures, ensures that reports are delivered on time, and conforms to any deadlines set forth by your company.
Both your financial and commercial success should be important to your bookkeepers. Your bookkeeper should have a keen eye for detail and care about maintaining accurate records for your business.
Strong communication skills
For them to do their work properly, your bookkeeper needs to be informed with your company’s activities, objectives, and problems. The perfect bookkeeper should be able to strengthen bonds with personnel, customers, suppliers, and management equally.
Some bookkeepers are far more skilled with figures than with people, but the ideal bookkeeping service for your company must be skilled in both areas. Make sure the bookkeeper is attentive to your needs and provides you with an understanding of the situation. A bookkeeper who uses a one-size-fits-all method of communication with clients won’t likely be able to match your demands or expectations because your company is as unique as you are.
A competent book-keeper will be able to get started right away if they are familiar with your industry, your operational procedures, and your needs.
Beyond overseeing the day-to-day accounting operations of your business, your bookkeeper should be well-versed on the sector you work in and how it applies to your particular financial circumstances. A bookkeeping service is more likely to identify errors and patterns in your data the more knowledgeable they are with industry trends and operations. This can shield you from filing mistakes and enable you to take advantage of potential tax breaks.
This is essential and unavoidable. To establish a relationship based on trust, both sides need to feel at ease with one another.
In order for your bookkeeper to maintain accurate, current records for you, it is crucial that you give them with all the necessary information. It would be sensible from a business standpoint to safeguard oneself with a confidentiality agreement.
While it’s crucial to have faith in your bookkeeper, you also need to make sure that your company is safeguarded. It shouldn’t be required, for instance, to grant bookkeepers access to the company’s bank accounts. The business owner should handle the banking payment, although compiling the supplier payment file is appropriate. When a new supplier is established, it should be verified that the bank account being used for payments is actually that of the supplier and that the invoices being sent are likewise active.
Guest post by : team Form -
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