It is often overlooked by new business owners that having tidy, predictable results shown clearly in your reports can actually help you to achieve success!
How can bookkeeping help my business?
We have worked with a client who wanted to sell their business in the last few years. Having monthly dashboards and up to date management accounts really helped them to discuss the results of their business with potential investors. If our client had fallen behind with his figures or not had any reports to send to potential buyers, he would have seemed less professional and some buyers would have felt put off. As well as giving you peace of mind each month that the important figures are being monitored, the dashboards are a clear way to show a snapshot to anyone interested in your business. BW Bookkeeping provide a dashboard to each client at the start of the month so that our clients feel in control of their progress.
How does working closely with my bookkeeper help?
We were able to assist when the potential buyers had additional questions, because over the years we had worked closely with the business owner. We often find that the year end work provided by accountants is perfect for fulfilling the compliance requirements, but the relationship is not as close between the client and the accountants. Bookkeepers speak to their clients every week or every month, which means a closer understanding develops. When an investor wants answers to their questions, BW Bookkeeping can really explain how the figures relate to the day to day running of that business.
Why does keeping up to date help with getting funding when needed?
We sometimes work with clients who have had to resort to emergency funding in difficult times. If you don’t have a handle on your business results, it can be difficult to get lenders to offer loans or finance agreements – which can lead to business owners having to borrow at higher rates of interest. If your books and results can not show that you have good control over your finances, you may only be able to turn to less reputable lenders who always charge higher rates. An example we have seen recently lead to a company being turned down by a high street bank with a lower rate of interest, meaning they had to turn to a high rate from another source of funding. We talked to the advisor from the bank and he explained that the client gave a different answer every time he asked a question and they seemed very unsure of when their existing HPs would come to an end. This level of uncertainty made the bank nervous about the company so they didn’t feel they could lend any money.
Why would I want to pay for bookkeeping when I have an accountant?
There are costs involved in keeping the books up to date, but we have seen that there is also a cost associated with letting your finances get out of control. No one really wants to pay for ANYTHING that they can avoid shelling out for, but up to date books with the right level of support will be money well spent.
Knowing that the VAT return is going to be filed on time, knowing that the right amount of VAT has been claimed back and feeling sure that every receipt is attached in your software are worth paying for.
When your accountant gets the log in to your software (Quickbooks or Xero) and they can see the banks are reconciled and the payroll journals are all correctly posted, it should mean that they do not have to charge you an additional fee for sorting through the mistakes you may have made. So if everything works well the bookkeeping cost is partly offset by a reduction in your year end accounts fee from your accountant.
Business support means business health
The reports from up to date bookkeeping show your figures for income, costs, profitability and cashflow. It can be daunting to look at the reports when you first start as no one goes into business with a burning desire to read pages of numbers. Looking regularly can help you spot trends and worrying results before they become a problem.
