Outsource Bookkeeping Service Providers

  • Accounting
  • Bookkeeping
  • US Taxation
  • Financial Planning
  • Accounting Software
  • Small Business Finance
You are here: Home / Bookkeeping / Bookkeeping is just data entry isn’t it?

Bookkeeping is just data entry isn’t it?

October 24, 2016 by cbn Leave a Comment

So many business owners think keeping their accounts or “doing the bookkeeping” is just entering data and therefore anyone can do it.  But is it just data entry or is there more to it than meets the eye?

Having been a bookkeeper for many years I know there are numerous business owners who think keeping their accounts is data entry – money in and money out.  And for many businesses it is as simple as that.  But there are also numerous business owners who know there is far more to keeping the accounts than that.  

Take a VAT registered business for example.  Would you expect an untrained inexperienced person to know what VAT can and can’t be claimed.  Do you expect them to understand the different VAT rates for different purchases and sales within the UK, the EC and Worldwide?  Would you expect them to know which VAT scheme is best for your business and have the experience to change to another scheme.  Would you expect them to attend a VAT inquiry and know that they have everything the VAT Inspector will ask for?

But that doesn’t matter to me as I am not VAT registered I hear you say!  That doesn’t mean there aren’t other things in your accounts that can go wrong because you have asked someone to do your accounts who has no experience.

Money in, money outYour accounts have a structure which ensures that there is consistency during the year and that each year is comparable with previous years.  The inexperienced person will record transactions in the first place they come across which seems appropriate.  So from experience we find expense transactions recorded within income (thereby reducing turnover) and income recorded in expenses (reducing costs) as well as expenses recorded in assets.  This gives you, the business owner, not only an inaccurate picture of how your business is doing if you do take a regular look at your reports, but will require your accountant to do more work to correct it and may even affect your VAT returns (HMRC will always tie up what you have declared as turnover on your VAT returns with your annual accounts).

Does someone without experience know that income from some sources such as Amazon or Stripe may have fees deducted from it before it arrives in your bank and therefore recording the amount received as income is incorrect?

How would it be for your business if you were chasing your customers for payment only to find that they had paid and the payment had been allocated to another person’s account or recorded as income rather than paying their invoice?

Bank reconciliationDoes someone inexperienced know why the bank account has to be reconciled and what to do if there are transactions in the bank account which aren’t reconciled?  There should never be any transactions unreconciled which can’t be explained as uncashed cheques or undeposited receipts and these should never be more than a few days old.   So many times we see unreconciled transactions going back months and even years.  Nobody has sorted them out or even realised that these are likely to be duplicate transactions which will have resulted in inaccurate accounts.

You may think your accountant will sort out all these issues for you but will they?  Do they? Unlikely. Accountants generally look at the bigger picture whilst bookkeepers manage the day to day.  

A bookkeeper will provide you with far more than data entry.  You can rely on a bookkeeper not only to know what they are doing but to highlight things which will be of benefit to your business.  You will be able to discuss your business and finances with them and not only will they listen they will be able to help you plan and put you in touch with contacts who may be able to help you.

It may seem cost effective to have someone doing your books who has no experience because they will, of
course, be cheaper than a qualified experienced bookkeeper but is it really cost effective in the long term? Experience shows it is really costly to sort out a bookkeeping mess. Trying to unpick and untangle is extremely time consuming and I have sorted out many of these over the years.  Business owners think they are saving money but bookkeeping is so much more than data entry.  Managing your accounts accurately ensures you have control of your finances and your cash flow and this vital aspect of your business should not be considered simple data entry.

Bookkeepers will be much quicker than someone inexperienced and their knowledge and experience can only enhance your business.  Try it!  I guarantee you won’t be disappointed.

Share on FacebookShare on TwitterShare on Google+Share on LinkedinShare on Pinterest

Filed Under: Bookkeeping

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Archives

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015

Recent Posts

  • CFP Board seeks to unleash the beauty of planning careers
  • Weekend Reading For Financial Planners (Jan 28-29)
  • Editor’s Comment: Rise in firm failures must stop
  • Pension tax reform needed to meet Hunt’s plan
  • Raymond James’ recent advisor hiring slows, but ‘very large teams’ soon to join

Recent Comments

    Categories

    • Accounting
    • Accounting Software
    • Bookkeeping
    • Financial Planning
    • Small Business Finance
    • Uncategorized
    • US Taxation

    Categories

    • Accounting (1,482)
    • Accounting Software (1,757)
    • Bookkeeping (1,471)
    • Financial Planning (3,308)
    • Small Business Finance (1)
    • Uncategorized (3,137)
    • US Taxation (462)

    Subscribe Our Newsletter

     Subscribing I accept the privacy rules of this site

    Copyright © 2023 · News Pro Theme on Genesis Framework · WordPress · Log in