Bookkeeping has moved on
I visited a typical small business during the week with our marketing assistant who has recently joined our marketing department.
Like many others who are not big enough to need a full time bookkeeper they have a lady who visits them every Thursday. She keeps their books on her laptop using her own copy of Sage. They are starting to feel a little uncomfortable about that as they are growing quickly.
She has a cup of coffee and collects supplier invoices, bank statements and job sheets that have been put in her tray. She raises their sales invoices at home over the next few days, emailing some and posting others.
Sometimes she has enough time to provide them with some Sage P&Ls and Balance Sheets. Also when she has time she will chase their debts for them.
Why are they worried?
They worry about what happens if she is ill, goes on holiday or her laptop breaks down.
They worry because there is a delay in their sales invoices being raised.
They worry becuase they haven’t got any up to date management information.
They only really find out where they are when the year end data is passed to their accountant. He then takes a few weeks to process it and about four months after their year end they find out how they did for the year which may prompt them to take some decisions, five months into their next financial year.
They are right to worry.
Our new marketing assistant thought that this way of keeping books and accounts must be unusual; how could they properly run their business? I assured him that it is very common.
So what did we talk about with them?
We went through our virtual accounts office service, tailored to reflect the size of the business. We decided to power this example using Xero. Our full blown version is the accounts department for Hatton Country World
How would it work? How could we possibly compete on cost they wondered?
We presented them with a solution where:
- Several members of their team could raise their own sales invoices easily – emailing them straight off or submitting them for approval by the business owner.
- Regular sales invoices could be raised by the system every month, automatically.
- We would enter their supplier invoices and attach scanned images of them so they could refer to them whenever they needed to.
- We would enter all their bank transactions and reconcile them
- They would get monthly management accounts ten days after the end of the month
- Their employees would be paid by BACS and have electronic payslips
- Their debtors would receive statements and be chased regularly
- Their data would be backed up and secure
- They could access their data whenever they wanted to, wherever they wanted to
- They would get annual accounts and their company tax return prepared soon after their year end
- They would get unlimited support throughout the year
- They would never have to worry about their books waiting while someone is ill or on holiday
- They could focus on their business without worrying where their finances were
- They could make business decisions based on information rather than gut feel
All for less than they are paying their bookkeeper and their accountant at the moment.
Our new assistant was impressed.