Why One Bookkeeper Could Cost You More Than a Team

Off the back of our article Maximising your Tax Advantage last month, we’ve had a number of Publicans enquire about our closing comment on keeping strong bookkeeping practices in check and whether this is best done building talent in-house or out-of-house, especially when faced with the ongoing challenge of their operation’s needs outpacing their internal resourcing.

For many organisations, their bookkeeper acts as a central point for their financial operations, regardless of whether they work inside the business, or are an outsourced supplier. This can take the form of the business’ bookkeeper having combined responsibility for specific bookkeeping tasks, and also crossing over to operation duties.

Whilst this is a convenient way to operate, it can increase risk as there is a lack of segregation of duties, plus it often causes inefficiencies. Inefficiencies can take place where the bookkeeper takes on responsibilities that should sit with other roles within the organisation, causing duplications and a lack of understanding. Segregation of duties can be difficult to achieve for many operators, so outsourcing is a way of achieving some segregation and therefore reducing the opportunity of fraud and increasing the ability to prevent costly errors. Below are some examples of key financial areas in a business that should be managed separately:

• Processing invoices and authorising payments

• Ordering, invoice checking and processing

• Credit card access and reconciliation

IS IT TIME TO REVIEW YOUR OPERATION’S BOOKKEEPING?

Elizabeth Elliot, our Director of Bookkeeping at Perks shares with us some insight into how to go about assessing this.

“Before setting down the path of selecting a bookkeeper for your business, all operators should ask themselves the following questions:

• When your current bookkeeper is sick or on holidays, what is the impact on your business?

• If your current bookkeeper were to leave your business, what would the impact be?

• How many “backups” do you have trained that can step into the shoes of your bookkeeper for any given duration of time?

• How many of the following areas below are managed by the same person/manager? - Purchases/Accounts payable - Sales/Accounts receivable - Payroll - Bank accounts and reconciliations”

If, like many operators, you find that it is difficult to succinctly answer any one of the above questions, chances are that your organisation has a highly centralised practice of bookkeeping. Whilst at the best of times this may provide a sense of control, it can easily derail if the person in question is absent from the business for any length of time.

HERE ARE SOME OF THE KEY WAYS AN OUTSOURCED BOOKKEEPER CAN HELP YOUR BUSINESS

1. Agility for your business

By having well-maintained books and processes, you will gain a clearer picture on your financial and operating position.

In addition, by having the added benefit of centralising your information into a cloud-based system means that you can access information on your business in realtime, enabling you to make well-informed decision or pivot where necessary.

Relationships are also critical to good business practices. Having an outsourced bookkeeping team can enable you to streamline your accounts payable and receivable processes, minimising delays and keeping you in good standing with your customers and suppliers.

2. Peace of mind

A robust, well-resourced bookkeeping team should be able to deliver 365-day year-round coverage to ensure that your business’ needs are always met. This means that your business should not be subject to staffing ebbs and flows, such as annual leave, sick leave and staffing changes.

3. Fixed costs

With a seasoned bookkeeping team, you should benefit from being able to negotiate the scope of work and subsequent fees upfront. In a well-resourced bookkeeping partner, this means that your supplier can work on a fixed fee model that suits your business requirements. Your supplier should also be able to provide experienced and qualified staff in whom they invest training and ongoing development at their own expense. This means that you should no longer have to worry about bearing the ongoing internal costs of hiring, training and managing (and paying) bookkeeping staff because your provider will have it covered.

4. Scalability

An experienced bookkeeping supplier should be equipped to work with you in any number of ways - whether it be the full outsourcing of your accounts and bookkeeping functions, or taking care of a single component of the bookkeeping function; whatever suits your overall needs. And if your needs change, your bookkeeping partner should have the ability to scale accordingly and in a timely fashion.

5. Easier collaboration

The strength of your team working towards the common goal of your business is key. Regardless of whether you use outsourcing to complement your internal team, a well-established external bookkeeping team should act as an extension of your team. They should be able to provide tangible examples and referees that can attest to how they have helped alleviate time, divided focus and reduced burden from the internal staff of other organisations.

It is also critical that your operational bookkeeping translates seamlessly into the information that your Accounting Partner requires to meet your business’ compliance and reporting needs. Regardless of whether your accounting partner sits on the other side of the country, or next door to your bookkeeping partner, having your processes and information welldocumented and organised into an accessible, multiuser, cloud-based environment means less time spent (and billed) sorting through the information.

6. More security

The nightmare of all operators is the impact of a fatal hardware/software/server crash. With so many businesses storing key information on spreadsheets and on desktops, the vulnerability to an unforeseen computer crash is fodder for business nightmares. Informed, modern, outsourced bookkeeping teams help to alleviate these fears. Supported through a cloudbased environment, your day-to-day financial operations are run and backed up in the cloud. Goodbye local hardware, software (or personnel) crashes!

Check that the credentials and listed partners of your bookkeeping team match your expectations of a supplier that is constantly evolving, staying on top of the changing technology and qualified to assist your business get the most out of the available tech and software. Is your provider a Xero Platinum Partner? Are they well-versed with MYOB, Quickbooks and other legacy systems? Without proven experience with a variety of systems, it might be questionable as to whether they will be equipped to ensure that your everyday bookkeeping information is accessible at the touch of a button.

7. Specialised expertise

If you are going to outsource a function of your business, you will want to ensure that you have access to a talent pool of highly skilled bookkeeping professionals whose key focus is delivering accurate and timely results for your business. The following should be queried when looking into a supplier:

• How often their Team Members actively participate in ongoing professional up-skilling.

• How the organisation ensures that their knowledge base is up-to-the-minute.

• What are the rigorous standards that they adhere to.

• Who oversees that their standards are assessed and met, ongoing?

8. Free up your headspace

Finally, no plan for success is complete without a roadmap to get there. Ensuring that your bookkeeping processes match your businesses’ needs are critical in enabling your operation to run as efficiently and effectively as possible. Experienced bookkeeping providers should be able to articulate how they would go about assessing, discussing, designing, and onboarding processes to (better) support your business, if needed.

A great bookkeeping team will ensure adherence to your approved processes, making sure that the right people are responsible for the right approvals and that the information they provide gets to the bookkeeping team in a fast and accurate manner. And the all-critical on-boarding process should allow for minimal to no downtime, so that your day-to-day operations are uninterrupted, and efficiencies felt from day one.

Pat Hodby and Tom Paine are Directors at Perks, South Australia’s leading privately-owned accounting and private wealth firm. They are the driving force behind the Perks Hospitality specialisation team and have both provided key advisory and operational support to a number of owner-operators in the sector, ranging from the structuring of their business, to back-of-house bookkeeping, to the streamlining and digitization of their support systems. Pat is also an active industry advocate for publicans and the hospitality industry and owns a successful pub in the Adelaide Hills.

Pat Hodby

Tom Paine