Untrained bookkeepers are bad for business
It’s common for business founders to do everything themselves in the early days of starting a business. There’s almost something romantic about a few risk-takers turning a crazy idea into an operational business from a garage. It’s the kind of story we hear all the time that inspires other hopeful entrepreneurs to do it too.
The catch is that you have to leave this bootstrapping phase for your business to continue growing – and many businesses do. However, some still keep bad habits from their formative phase that can impede a business’s progression. One such bad habit that we see all the time is trying to get by with an untrained bookkeeper.
You might think you know enough to balance your books, but bookkeeping and accounting are so much more than that. Here are some of the dangers of trusting an untrained bookkeeper:
1. Inconsistent data entry
Data entry is one of the most vital parts of good bookkeeping. Every transaction needs to be recorded on time and accurately. This helps you have a clear picture of how viable or profitable your business is at any given time. An untrained bookkeeper might not always know in which account on your ledger every transaction goes. One mistake could cost your business money, customers or your reputation. An untrained bookkeeper might also not know all of the latest ways to optimise data entry (for example, through automation and systems integration). If they’re still doing everything manually, mistakes are bound to happen.
2. Inefficient tax filing
One of the important jobs of a bookkeeper or accountant is to keep your financial records tax-ready, not just during tax season but throughout the year. Someone who isn’t adequately trained is likely to scramble to file your tax returns at the last minute and make some avoidable errors. They could also be mishandling your employees’ PAYE filing throughout the year or failing to declare lucrative tax write-offs.
Tax is a specialist skill and should always be handled as such. You need someone who knows exactly what processes to follow to keep your books clean and ensure you’re never paying more tax than you have to.
3. Missed growth opportunities
Since bookkeepers are closely involved with all your business’s financial transactions, they’re primed to spot patterns first. They also rely on years of experience with other businesses to guide their thinking. There’s no financial problem that is ever entirely new for a trained bookkeeper, which is why they’re excellent at proactively identifying growth opportunities. An untrained bookkeeper is more preoccupied with getting all the financial data right to focus on what all the data means. A more experienced professional can use insights to fast-track your business’s growth.
4. Bad business decisions
In addition to identifying growth opportunities, bookkeepers are also there to help you avoid or recover from financial pitfalls. A trained bookkeeper can deliver uncommon wisdom about how to keep your liabilities under control, maintain healthy revenue and keep your overheads to a minimum. Many businesses have suffered due to the global pandemic, with some having to close temporarily or permanently. Bookkeepers and accountants are invaluable business advisers that can save a business during times like these. If all your business decisions are based on your books, wouldn’t you want someone who’s rigorously trained to manage them?
Get trained with R&A
The Rae & Associates bookkeeping course is a comprehensive 23-module curriculum that covers everything from the general principles of debit and credit to the finer points of managing cash flow for SMEs. It gives you all the tools you need to master financial management for modern business and has helped several businesses regain control of their books. Registration is quick and easy and the whole course happens online so that you can attend from home.
Sign up today and boost your bookkeeping skills.
