Why Bookkeeping is a Crucial Career According to a Small Business Owner
Today, every small business needs to make sure their accounts are in order — and not only at tax time. What isn’t as obvious is the positive impact that having someone else taking care of the books can have on a business as a whole.
I talked to a successful small business owner, Prue Aja, and her bookkeeper, Megan Velo, in a detailed interview talking all things books. This deep-dive discovers how bookkeeping is much more than just numbers, and looks at the vital role a reliable bookkeeper has had on Prue’s personal branding and portrait photography business.
What makes a business owner decide to hire a bookkeeper?
As a small business grows, the financial side of things tends to become more complex and the importance of maintaining accurate financial records increases. Bookkeeping can often become a time-consuming exercise that, if not done efficiently, can swallow up valuable hours. Prue knew this all too well:
“I would end up spending hours trying to work out how to do my books, where I could have been spending that time growing my business,” she says.
The repercussions of inaccuracy when recording financial transactions for a small business can be huge. They can lead to unexpected and massive repayment obligations that sometimes take years to pay off.
“When it came time to do my quarterly BAS (Business Activity Statement), I would feel this enormous weight on my shoulders and such unnecessary stress,” Prue says. “I also made a lot of mistakes and even got myself into trouble and got a massive tax bill!”
Many small business owners now opt to outsource a bookkeeper to relieve the pressure that so easily mounts up, freeing up their time and brain-power so that they can focus on the parts of their business that bring in revenue and mean so much more to them.
“I find that when there are things you don’t enjoy doing, the best thing to do is outsource them.”
Why is the human element of bookkeeping so important?
A small business could easily hire someone to input financial data into some software for them, but I have discovered in speaking to Prue and Megan that a bookkeeper needs to genuinely take a human interest in their business. In focusing on the goals their client wants to achieve, a good bookkeeper can make those numbers mean something to the business owner and help them streamline their current processes.
“Megan has gotten me into really good habits like taking photos of my receipts as soon as I get them and uploading them onto a system, so everything stays crystal clear,” Prue says.
“Working with Megan has allowed me to look back and see clearly how much I’ve made, how much my expenses are so I can think, right — maybe I should stop spending money on this, or this part of my business doesn’t actually make that much money so let’s get rid of it.”
Prue goes on to say, “It has allowed me to set more achievable goals, and to know how much money to put aside for when my tax and my BAS comes around, so I am not stung. It’s allowed me to know how much to pay myself, allowed me to save money and put a deposit on a house and has just meant everything — Megan is everything!”
Megan often finds herself teaching her clients how to view their financial information more clearly when it comes to their incomings and outgoings.
“I often try to get some business education in there — not so much for Prue, but I have another client who has a smaller gross margin, so if they go and spend money on something, it’s important for them to know how many bookings/appointments (or whatever they sell) they need to make to cover it,” Megan explains.
An example of how Megan’s adaptability has positively impacted Prue’s business, was the crises many small businesses faced in 2020, and the restrictions associated with Covid19. As a photographer in personal branding, Prue was unable to work for several months, and the process of claiming the JobKepper supplement through the ATO was no small feat. Megan was able to help with the burden of the ‘form-filling’ and understood what was required to ensure Prue had all of her ducks in a row until her usual cash flow resumed.
Along with the above and many other human elements essential to success as a bookkeeper, finances are incredibly personal, so being able to trust your bookkeeper is imperative. Megan explains that because her clients trust her with the most sensitive information, she can offer more insights and help them in areas that she wouldn’t be able to if she were not privy to the smallest details.
Human-centric skills bookkeepers use every day
Being able to look outside the box, assess information and come up with solutions to problems that your client may not be able to see can be a gamechanger for any small business.
Teaching a client how to create new habits and implement small changes in the way they run their business’s financial side can make a huge difference to the company as a whole.
When a client can rely on you to flag a problem, get back to them quickly, answer any questions, you make a client feel confident in your service. Good communication – Crucial in many jobs, communication is vital when working in an intricate area like finances.
As mentioned above, finances are a deeply personal subject, so a client needs to have faith in you as a professional and trust you entirely.
Being honest and direct
Beating around the bush won’t get you far when talking to clients about their money. The direct approach is always best to avoid confusion and save precious time.
The ability to look at a business and tailor your service to its individual goals needs will ensure you are attractive to new clients.
If you are asked a question or given a task, you must have the skills and the knowledge to assist your client.
Understanding when something seems obvious to you, may not be to your client and exercising patience and kindness when relating to them will make you a huge asset.
“It is actually quite an emotional job — anything with money is sensitive, and you need to be compassionate. You are dealing with small business owners that are putting their heart and soul into something, and sometimes it doesn’t pay off if they didn’t hit the sales they wanted, so being really understanding is important,” Megan says.
The importance of having a qualification
When a business owner hires a bookkeeper, they are instilling full trust in the person to take care of a considerable part of what keeps that business going. With accountings knowledge and bookkeeping skills not something you can jump into blind and learn by trial and error, knowing what you are doing as a bookkeeper is essential — especially if you wish to become a BAS agent in the future.
The potential risks of not having the proper training and background knowledge into the industry could result in enormous ramifications for your client and of course, your own business.
“It’s really important to get your grasp on basic accounting. A bookkeeper needs to know the background, not just how to use the software,” Megan explains.
You may already have some experience, and sound knowledge of how accounting works for a business, or you could be at entry-level in this field. Either way, there is a short course out there to help you on your career path. There are even courses and resources on using specific accounting software.
A bookkeeper‘s impact on a small business is huge. From saving money, to relieving stress and instilling peace of mind, small businesses will need bookkeepers and accountants for years to come. Imagine being able to help in small businesses‘ successes, and potentially building one of your own in this highly sought after sector.
Ready to take the next step in becoming a bookkeeper?