Friday, February 8, 2013

Accountancy 101 – Important Insights for Small Businesses


What options are available for manual bookkeeping?

If looking to keep track of accounts manually, the most common and readily available methods of doing so are as follows:
  • Manual Record Keeping – This is the process whereby the business owner invests in a traditional bookkeeping book or a set of leaves, which can be picked up from most decent stationary shops. The primary benefit is the ease of using such papers and the near zero costs, but on the downside these represent the only copies of the accounts with no specific backup, plus are wide-open to human-error.
  • Excel – Probably the most popular of all for smaller businesses, the use of Excel spreadsheets basically represents the contemporary version of the above. Added bonuses of using digital spreadsheets include the accuracy of using automated formulae, simple date entry and the ability to keep backups.
  • Software – Software takes things one step further, offering dedicated systems for account keeping designed by popular names including Sage. These packages are both comprehensive and excellent, though can take some time to get to grips with.


What should be looked for in an accountant?

If looking to take on an accountant in the UK, little speaks higher than the qualifications they’ve earned and can substantiate. Among the most recognised and notable of all are those from the Institute of Chartered Accountants in England and Wales, the Institute of Financial Accountants and the Association of Chartered Certified Accountants. When hiring School Run Bookkeepers for example this may not be essential, but when looking at an established firm such qualifications speak volumes.

What’s more, it is of vital importance to choose an accountant that is easy to get along with and shares the same drives and interests as the business and its owner. Much of the partnership is based on trust and the exchange of privileged information – something that becomes very difficult when the two parties are clashing.

Is Outsourcing Beneficial?

In almost every instance, outsourcing can bring enormous benefits including higher accuracy, improved productivity and lower costs. The exact level of benefit will of course depend on the business and the way in which it functions, though benefits are largely guaranteed across the board. Even if the business only needs to give thought and consideration to direct debit payments and SEPA transfer obligations, putting these duties into the hands of those who know them best in turn rules out various errors, omissions, delays and potential penalties.

What’s more, it is also 100% possible to outsources some of the duties of the business and keep others under full, personal control. It isn’t a case of black or white in terms of outsourced or internally-managed accounts – those at the top of the industry can offer as much or as little input as the business owners deem fit.

When should outsourcing be considered?

Generally speaking, the earlier the pros are brought in to help, the better. However, there are certain sure fire warning signs that a change needs to be made, which include rising accountancy costs, frequent mistakes, inability to keep track, mounting paperwork or any pressing legal issues including those relating to tax. Should any of these rear their ugly heads – outsourcing should be given top priority.

By Sean Gill
Sean Gill is an accountancy professional from the West Midland who offers consultancy and advice to small businesses on matters like direct debit payments management. He is also a champion of the School Run Bookkeepers system, of which his wife of three years recently became a participant.

0 comments:

Post a Comment