The bookkeeper is your business’s best friend at EOFY
There’s a historical stigma about the bookkeeper as some kind of bean counter, but thinking like this may cause you to miss out on the best value information you can glean from your business finances at a very important time of year.
20 years ago, the role of bookkeepers was centred around capturing and recording important financial data within a business. Today, things look very different.
Not only has legislation just passed allowing bookkeepers to register as tax preparers, there are a whole suite of other services this profession can offer New Zealand’s entrepreneurs and business owners.
President of the Institute of Certified New Zealand Bookkeepers (ICNZB), Di Crawford-Errington recently told The Pulse that today’s bookkeepers have much more value to offer a business than straight-up data entry.
“This is due to the fact we are working on the ground floor with clients, providing advice on systems management, creating efficiencies within their operations, interpreting the data and providing insights which enables clients to make sound business decisions based on up to date and accurate information,” said Crawford-Errington.
“The numbers tell the story and experienced bookkeepers see the threats and opportunities due to the unique perspective we have working in the numbers on a regular basis.”
In fact, bookkeepers contribute more value than they charge a business – but only if they’re being utilised correctly.
What’s the difference between accountants and bookkeepers?
Some businesses have attempted to outsource bookkeeping services to others, often below market rate, and that’s caused two problems.
The first is potentially less work for high quality bookkeepers, while at the same time businesses are missing out on the valuable insights bookkeepers can offer. And that second point is a real problem, especially in the lead up to End of Financial Year.
“Some business owners may be confused about the key differences between the role of bookkeepers and accountants,” said Crawford-Errington.
“A bookkeeper keeps financial records on your business activities and ensures you’re compliant with the legislation, whereas an accountant will work with you on a more strategic level, working on the big picture painted by the financial records the bookkeeper has prepared.”
Sue Inkersell, Treasurer for ICNZB has an even simpler explanation.
“A bookkeeper does the ‘day-to-day’ work for businesses, while the accountant is engaged more periodically: end of the month, end of the period, end of the year.
“Bookkeepers are the detail and accountants are the big picture.”
High value financial insights
Good bookkeepers provide value to a business beyond doing the books because they’re at the coal face of your business finances.
As a result, they’ll see threats and opportunities often before the business owner can.
“Over the last few years, a professional bookkeeper has become one of the most trusted advisors in a business owner’s support network,” said Crawford-Errington.
“We are working so closely with business owners that we understand the challenges they face, we assist with operational and management issues, monitor cash flow and help the business owner understand the numbers.”
Sam Walton, founder of Walmart, is famous for encouraging those at the coal face to contribute ideas to take the business forward – because they had a perspective those in the boardroom couldn’t have.
“Our best ideas come from clerks and stockboys.” – Sam Walton
It’s for this reason that the role of the bookkeeper is shifting towards a business advisory role, harnessing the insights they provide by forensically looking at the numbers to offer a unique perspective.
According to Inkersell, bookkeepers are also uniquely positioned to provide advice and training in the use of the key financial software systems your business requires for efficient recordkeeping.
“Yes, there is a whole lot less data entry, but because the more basic bookkeeping is now removed, the client doesn’t generally have the knowledge to run the software and manage the systems necessary to maintain accurate financial data,” said Inkersell.
“Technology has changed the way we work but that’s only making bookkeepers more valuable to our clients, and therefore more valued.”
What other things can I ask of my bookkeeper?
According to the team at ICNZB, there are a range of things business owners can look to their bookkeeper to provide, above and beyond the traditional function of bookkeeping.
- Systems and process management
- Specialist software advice
- Payroll services
- Training in software and systems
- Data rescue (fix errors in your data)
- Cash flow forecasting
- Assist with and preparation of budgets
- Growth strategy
- Ground-floor business advisory
“Like any professional, each bookkeeper is an individual and will have different strengths and experiences, so you’ll want to qualify what your bookkeeper can provide against what you think your
business needs,” said Crawford-Errington.
Engage a bookkeeper to ease the burden this end of financial year
End of financial year (EOFY) is a busy time for all businesses, and the last thing you want to do is let bookkeeping get the better of you.
“A bookkeeper can ensure you know exactly where you sit financially for the year so you can make strong decisions prior to the end of the year,” said Crawford-Errington.
“They will collate the information your accountant will need, making certain that all the data is reconciled.”
For Inkersell, this means businesses with bookkeepers find EOFY much less painful.
“Because the accountant receives the client’s information in a timely and accurate state, it takes less time for them to process and lodge.
“A good bookkeeper will identify anything the accountant needs to be aware of, supplying them with all the supporting documentation attached, which will enable the EOFY process to be completed quickly and smoothly.”