What is a Bookkeeper and Why Do I Need One?

Whether you are a sole trader, a fast-growing startup or an established business, every business needs a bookkeeper. Aside from the convenience of staying on top of the day-to-day finances, a good bookkeeper can provide you with monthly business reports, giving you visibility over the performance of your business and its cashflow. While of course you could learn the bookkeeping basics yourself as a business owner, your time is far better spent growing your business.

What is bookkeeper? A bookkeeper records all financial transactions for a business. Some will also create invoices, manage accounts receivable and payable, run payroll, prepare VAT returns and generally keep the books in order to provide accurate and up to date financials for a business. A good bookkeeper should also identify trends in spending and catch any duplicate charges. A bookkeeper can provide monthly financial statements to business owners, ensuring they are on top of the financial performance of the business. They can also ensure customers are paying sales invoices on time, maximising the cashflow of the business.

What are the advantages of hiring a bookkeeper? Whilst employing a bookkeeper will obviously cost money, there are savings to be made in the long run by ensuring VAT returns and other taxes are paid on time and compliance deadlines are adhered to. HMRC and Companies House can charge hefty late filing fees (which, by the way, are not tax deductible). Bookkeepers can also help to prevent errors. An innocent error in the books could result in misreporting figures to HMRC, meaning you could either be fined or end up paying more tax than you should. A bookkeeper will make sure your books are accurate. In theory, well-kept books should also result in a less costly year-end fee from your accountant, as they will not have had to trawl through and check every transaction. A DIY approach to bookkeeping can be very time consuming for business owners, who could better spend their time focussing on servicing their clients, growing and marketing their business etc.

If you are a business owner and struggling to stay on top of everything, now could be the perfect time to hire a bookkeeper!