Many people shy away from doing their own bookkeeping as they feel they don’t have the accountancy or bookkeeping skills and are affraid that they might make costly mistakes. While it is true that this can happen, with a little training you could be able to take control of your accounts, saving you accountancy fees, time and having a better understanding of your company’s financial position. We do fully endorse people doing their own bookkeeping but we recommend working with someone with experience who knows what they are doing at least to start with, to avoid some basic pitfalls. And sometimes this does happen, so we recommend that you use the following steps to help you find the right solution for you:
I was recently working with a new client who had until then had their own part-time bookkeeper, working a few hours a week. This was costing a modest £70 per week, but over the course of a year that amounted to over £3,600. In addition to this, they also like most companies need to use an accountant to run the weekly payroll, calculate their corporation tax and submit their annual accounts to HMRC.
They had been using Sage Accounting and also wanted to update their software to one of the newer fully online accounting packages, enabling them to enter their sales and purchase invoices from anywhere, on any computer. The company was a small business in the Totnes area and they had always found it annoying that they had to go into the office to take in receipts for expenses, raise sales invoices and for the owner to have a look at the books. The owner wanted to have more control over the finances, enable the staff to send in their expenses from their phones and reduce his operating expenses.
These are just a few of the reasons that you might want to do your own bookkeeping or at least part of them; there are many, and you might like my article about the ‘benefits of doing your own bookkeeping’ to the best ways of getting this started, or ‘Xero – more than just accounting software’ to see a have a more comprehensive understanding of what is possible with modern online accounting software solutions.
After agreeing an action plan with the client, we did a migration of their data from Sage Accounting to Xero Accounting. We made sure that the debtors and creditors agreed with their previous accounts, set up the bank feeds, entered all the the opening balances and designed branded quotations, sales and purchase invoices and imported all of their customer and supplier data. Their bookkeeper already had experience of using Xero Accounting and agreed to hand over to the business owner for him to start entering. We left the client very happy with a working accounting system and a plan as to how to move forward.
We complete the clients Xero Accounting migration just before the Covid-19 coronavirus lockdown. The client temporarily closed some of their operations and their bookkeerper was furloughed. The owner decided to start doing some bookkeeping himself but did not have any basic accounting knowledge; on the face of it everything seemed to be going OK and his bank current account was fully reconciled. Six weeks later he contacted us to ask of we could have a look at the books to make sure everything looked good but unfortunately that was not the case. Without the basic introduction, training or guidance he had made a number of mistakes. On further investigation we had to deliver the news that he would need to have someone completely re-do almost all of the transactions he had entered. This of course was no direct or intentional fault of the client and circumstances were mostly to blame, but it is a great example that ensuring you know what you are doing and getting some expert help can go a very long way to avoiding costly mistakes.
The answer to that is it certainly can be and as I have said we actively encourage our clients to be a part of their bookkeeping and accounting processes. We believe that almost all companies could benefit from playing a larger role in at least part of it and you might be surprised at how much more can be gained by moderns accounting packages than just saving money; for small companies it could revolutionise the way you work and significantly improve productivity. We would welcome the opportunity to discuss how this applies to you and your company so get in touch by email, phone or by completing the form below. We look forward to hearing from you.
