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Financial Advice

A Skilled Bookkeeper Will Save You Time & Money

By November 2021December 7th, 2021No Comments

Remember when even relatively small businesses needed a full-time bookkeeper? Emails, integrated systems, and automation mean that’s no longer the case. The need of businesses – in bookkeeping terms – has switched from being a time-based need to a skills-based need. In this blog, I explain why you should view bookkeeping as a skilled role that adds real value to your business.

Bookkeeping then and now

20 years ago, the bookkeeper would arrive at the office to find piles of expenditure receipts, invoices, and bills on their desk. Much of their time was dedicated to digitising this information by typing it into the accounting system. It was largely a low-skill data entry job. You could hire almost anyone to do this kind of work. Once they had been shown what to do, they simply had to repeat the process. If you can do five, you can do five hundred. Of course, manual data entry is slow, so it took a long time to get through those piles of paper.

Here’s an example of a bookkeeping task that used to take a day and now takes minutes. I remember, at my first job in an accounts department, sending out monthly statements to customers. There was a whole day after month-end that was dedicated to sending out statements. It involved a lot of printing and folding and putting into envelopes, with reconciliation as you went along. Now I can send statements to all our clients within 2 minutes, emailing them directly from Xero.

So today, as I mentioned above, technology does the heavy lifting on this side of the bookkeeping function:

  • Your spending on items automatically comes into your accounting system;
  • your invoices are generated automatically on a repeated schedule or perhaps coming in from another system;
  • there’s an element of automated matching of spending; and
  • you may have direct debits triggering payment automatically on due dates.

Bringing value to the bookkeeping role

What does this mean? With the low-skill, manual tasks taken care of, the bookkeeping role has changed. What you now have is an overseer of data, an implementer of processes, an assurer of quality. The modern bookkeeper understands accounting and accounting systems. They’ll know how to use automation and configure systems set-ups.

For example, if your employees use an expenses app, configuring how that’s set up and making sure it is working the right way can save thousands of hours of manual input per year. Putting your fixed assets on the register so that depreciation is calculated automatically will save calculations being done manually in a spreadsheet and instead make it a job that takes just minutes.

This is what bookkeeping should be about now. You need to make sure that everything is set up and configured correctly on day one, then an experienced person can oversee that and keep it all running smoothly with much lower levels of hours than in the past.

To give you a benchmark, we are able to deliver a solution to a company turning over €1 million per year with half a day of bookkeeping per week – leveraging automation, this is enough time to cover tasks such as VAT returns, payroll, bank reconciliation, credit control, and posting purchase invoices. For a company of this size, bookkeeping used to be a full-time job.

Bookkeeping within the Beyond team

Because we’re accountants, we understand the immense value that comes from placing quality bookkeeping at the heart of a financial function. That’s why we only place qualified bookkeepers with our clients. Some of our bookkeepers are in fact qualified accountants, plus they all have past experience and get training from us every month on the cloud accounting systems they use daily. So they really do deliver in terms of their knowledge and understanding.

An unskilled person will take more hours to complete their tasks than a skilled, experienced one. There’s a high risk that they will do things the wrong way and then the company would have to pay the accountant to put them right.

As an outsourced service, we charge a fee of €40 per hour for our bookkeepers. A business owner who is watching the pennies may be less inclined to pay this when they could advertise locally for a part-time bookkeeper or maybe offer the job to a family member. They might pay €12 – €15 per hour because it’s “easy” work.

In such a case, the business owner would be paying less per hour, but an unskilled person will take more hours to complete their tasks than a skilled, experienced one. There’s a high risk that they will do things the wrong way and then the company would have to pay the accountant to put them right. An unskilled person may spend a lot of time doing things that didn’t need doing because the systems weren’t set up correctly in the first place.

Great bookkeepers save you money!

Because bookkeeping is no longer the unskilled data entry job it used to be, I wouldn’t let an unqualified person anywhere near my accounting system now! If your business is turning over €1 million per year and it costs around €140 a week to have all the bookkeeping done (and done well), that’s fantastic value. It’s maybe €6,000 per year instead of the €30,000 per year salary it would have been in the past. That’s why the outsourced model works so well in this area. Just like outsourcing your management accounting, you get more for less – but it only works when the bookkeeper is a trusted expert.

Bookkeepers and accountants are not interchangeable. Although I said that our bookkeepers are sometimes qualified accountants, their roles are distinct. People who enjoy bookkeeping tend to be very methodical and will develop a reliable routine for each business that stays on top of jobs and keeps things ordered. They may well stay with the same clients for five or ten years. If you find a bookkeeper who works well in your organisation, is a good fit with your methodologies and workflows, and has built a strong relationship with you, they are worth their weight in gold.

These bookkeepers bring real value because not only do you have peace of mind about critical tasks being completed, but they also see processes and systems in other companies that they can introduce to your business. That knowledge of best practice and what’s working well out there is something that a bookkeeper who only works for you will never acquire.

It might feel like €40 per hour is a lot if you’re still seeing bookkeeping as an unskilled job. But, if you see it for what it is, that price is actually a bargain for the value you’re getting. A plumber, electrician, or IT tech could be charging anything from €80 to €120 per hour. In our experience, an hour of work completed by the bookkeeper that costs €40 per hour is worth 10 hours of the person who is being paid €15 per hour. Paying less is simply false economy!

Outsource your bookkeeping

We’ve looked before at how much bookkeeping should cost an organisation and how cost-effective it is to outsource your accounting function. If you’d like to have a conversation about outsourcing, get in touch.

Great bookkeeping is the basis of our outsourced accounting service. If you’re interested in getting more input into your financial management, get in touch today.
Rory