In-house v outsourcing your bookkeeping and admin

http://www.oakbookkeepingservices.co.uk/         Your local independent bookkeeper in Reading

Do you procrastinate when it comes to dealing with paperwork in your business? Finding time to run your business, network and spend time with family and friends can leave little time to keep your financial and admin records up to date. So a little extra help seems a good idea.

Do you hire someone in or outsource? There are advantages and disadvantages to both.

The advantage of having someone in-house means you have someone in the office to deal with the finance and admin tasks, answer the phones and other ad-hoc tasks.

The disadvantage is that you also have a payroll to run with a regular salary, national insurance, holiday, sick and possibly maternity/paternity to allow for. Let’s not forget the upcoming auto-enrolment.

Using an outsourced bookkeeper has the advantage of having some-one working only when you need them. There are no employment taxes – the bookkeeper is self-employed and pays their own.

If they work off-site there are no office costs, laptop and software costs. If they work on-site then the above may be provided by either the business or the bookkeeper depending on the business requirements. The paperwork stays on-site

The disadvantage is that they’re not on call when you may need them. If they work off site it’s not easy for either to ask questions. They would also need to take paperwork way so you have to wait till their next in should you have a supplier/customer query.

As a sole trader or small limited company when you don’t need a full time bookkeeper outsourcing definitely has more advantages than having an in-house bookkeeper.  You outsource only the parts you don’t want or have time to do, whether it's the general bookkeeping, invoicing or credit control. They work only when you need them to and ultimately you save money by reducing your overheads.

 

Desktop or Cloud

www.oakbookkeepingservices.co.uk  Your Reading based bookkeeper

The cloud is here to stay so do you stick with your desktop software or move to the cloud.  I see pros and cons with both.  For me the main ones being security and access to the internet. 

I want to be sure my clients will feel confident that no-one will hack into their accounts - if it’s on the web we worry it may happen but if it’s on my laptop we worry it may be broken into. 

The same with the internet – if it’s on my laptop I know I can work anywhere my laptop is and if it’s on the web my clients can also have access to it. The former means I am doing their bookkeeping for them unless they do their accounts during the month / quarter / year and then pass me the backup to do the reconciliations, month/ year end accounts etc.

The latter also allows them to see at a glance how their business is doing.  More and more clients these days want to have more of a hand in their accounts which is as it should be.  In the past if an owner was asked ‘how’s business’ they would have had to ask their accountant. Now they can see with the touch of a button how it is. 

With smartphones and tablets the clients can issue invoices as they leave their customer or can scan expenses and receipts straight in. 

Although there is usually a monthly charge for web based accounting packages it can easily be recouped by business owners  as they can also do some of their own bookkeeping which, if they have the time, will help keep administration costs down. Especially in the early start-up days when you’re trying to minimise your outgoings and don’t want to have to pay up too many upfront costs, a web based system is the way forward.

I have some clients who just want to know how much they’ve made, have to pay in VAT etc so don’t want to see the accounting system and I have some who want to be more involved in the day to day running of the accounts. So for me I’m going to keep a foot in both camps.   I also want to be able to do some work when my broadband occasionally goes down. 

www.oakbookkeepingservices.co.uk           Your local Reading Bookkeeper




I have contributed a news item to the ICB monthly newsletter.   If you want to read it please follow the link https://www.bookkeepers.org.uk/resources/news/general/4-ways-to-stay-up-to-date/a/1036


Regards

Tax return not what you expected.

It is thought approx 1.5 million people have still not done their tax return for 2012/3 for various reasons. Why does the self-assessment tax return take so many by surprise.  Its a bit like Christmas we all know what date it’s going to be on but unless we are all organised we are never ready for it.  I know several sole traders – not my clients – who have turned round and said they did not know how they were paying their tax demand as it was more than they expected.   With some they had not taken into account the payment in advance they are having to make but others had not realised how much they had earned. 

 

Firstly as a business you should be keeping track of your turnover and your expenses.  Secondly if you do your books – or get a bookkeeper to look at them - on a regular basis then you have a rough idea what the payment is likely to be.  Considering there is nine months from the end of the tax year till the return has to be done there is sufficient time to get the return done and if necessary set up an agreement with HMRC to get the monies owed paid.

Wishing everyone a healthy and prosperous 2014 from Oak Bookkeeping Services

Expanding my business network

This is a one-off request as normally I use this page just for blogging about what I hope are interesting and useful business aspects.   I am trying to expand my twitter and Facebook presence and would appreciate people liking or following me on either.

The links are 

Twitter: https://twitter.com/OakBookkeeping

Facebook: https://www.facebook.com/OakBookkeepingServices

Please note you can also follow my blog posts by adding your email in the box on the top right.

Thank you in advance.

Liz

Money makes the world go round

Although we may not always use hard cash those words are still as true as when Liza Minnelli sang them in Cabaret.   It's said that more companies go out of business from lack of ready cash than from lack of sales, although without the sales the business isn't going to go anywhere anyway.

It's ok being asset rich but if you cannot convert this to ready cash when required then you have a problem. Looking at it simply if you think about buying stock on thirty days payment then selling - at a profit - but also on thirty days payment. When it comes to paying the supplier it looks as if you have done well but you have not yet received any payment so have no money to pay the supplier.  Your supplier stops your credit and you can't get any more supplies, your purchaser eventually pays but is not coming back to you as you couldn't guarantee their next order. End result you go out of business.

This is why a cash flow forecast is important to any business and is simple to create.  Start off with your projected sales, list your fixed and variable overheads, deduct one from the other. Link this with the cash in your bank and bring the balance forward to the next month.  The varied costs will change and the sales will probably not come in exactly to the date payment is expected but if you allow for this then you will be prepared for anything that happens. 

Keeping track as to whether your actual figures vary to your forecasted is important. Allow for seasonal adjustments.  This will always be an on-going project but it is one of the most important tasks necessary to stay in business.

If you have any questions on this please contact me on liz@oakbookkeepingservices.co.uk

www.oakbookkeepingservices.co.uk 
Adding value to your business.    Based in Reading, Berkshire.