What’s the first image in your head when you hear the word bookkeeper? Is it a man sitting behind a desk, madly doing sums on a calculator? Is it a busy mum, juggling paper work and a couple of young kids? Is it a small business owner ‘doing their paperwork’ after a full day in the business? Is it a professional, with years of experience and training behind them, and continuing professional development targets to meet? I bet it’s not the last one …
For many years, bookkeepers have been seen as something less than professional, something less than necessary to a small business. A ‘nice to have’ rather than an essential part of running a business. Maybe, that’s because someone has to ‘do the books’ in any business after all. That implies that it’s a job anyone can do. That in turn implies that it is a worthless task, which cannot add value to your business, and which – if you pay someone to do it – is just dead money. That is, there is a perception that paying for a bookkeeper may be money spent for no visible positive impact on your business..
Have you found yourself in the position of the business owner, trying to do the books after spending 70 or 80 hours a week building it? How exhausted are you, and how often have you thought “I didn’t go into business to do all this paperwork!”? And, of course, it’s BAS time again, meaning you need to pay GST, PAYG-W and Staff Superannuation. So now, you somehow need to figure out how much to pay, and when it needs to be paid by. But wait! Which of those payments have GST on them? And how are you supposed to know? After all, you’re the … mechanic, engineer, baker, landscaper, doctor …
In simplest terms, a bookkeeper is the person responsible for managing the financial records of a business. They can be either the business owner, an employee, or a professional contracted bookkeeper.
- In general, an internal bookkeeper (ie the business owner or an employee) requires no training, knowledge or experience to take this role on. Is that a scary thought? ANYONE can look after your records!
- Professional (contract) bookkeepers will generally be registered BAS agents, or working towards this under the guidance of an already registered BAS Agent. In addition, they may also hold memberships with professional bodies, and partner programs with the major accounting software packages. They will have invested considerable time, effort and energy into their training and education, and will have professional education requirements to meet (in order to maintain their registrations and memberships). So, a professional bookkeeper brings with them the benefits of extensive training and experience, continuing professional education requirements, and all the knowledge gained by working for a variety of clients over many different scenarios.
Some of their roles include:
- Issuing your invoices, and pays your suppliers.
- Calculating the wages and paying the staff, often determining the award your staff are employed under. They calculate Gross Pay, Allowances, Loadings, PAYG-W (tax deducted from staff wages), and mandatory Superannuation Contributions.
- Calculating GST – both on invoices you issue, and checking it’s correct on the bills you receive.
- Preparing, lodging and paying the Business Activity Statements and superannuation returns
- Organising all your records in order to hand over to the accountant so your tax returns can be completed and lodged.
In short, the bookkeeper – be that yourself as the business owner or someone you pay to perform those functions – has a very real, tangible effect on your business. Not meeting your obligations to your staff, suppliers or tax department will almost certainly have a real, measurable, negative impact on the business – in many cases, causing the end of the business itself. Whilst the impact of a good bookkeeper is not as immediately apparent, they will keep you in good standing with the staff, suppliers and other interested parties to the business. How much is that good name worth?
So, now that we’ve looked at the simplest measures of what a bookkeeper is, and how they can affect your business, our next blog will talk about all the many and varied aspects of the profession.
Related Tag: Bookkeeping For Startups