Maintaining the books isn’t exactly a prospect many business leaders enjoy, let alone individuals in the creative industry – there are a lot more exciting things to be doing.
There are also other things business owners need to be doing, so it’s not unsurprising that the books often get left behind.
But as soon as they are, you risk legal trouble if you don’t keep certain records, while out-of-date books could result in you being turned down for a vital loan.
But what does good accounting look like? How can you better maintain the books for your creative business? And should you hire a bookkeeper?
What does good bookkeeping look like?
Bookkeeping is the process in which records of all business transactions are collected and recorded on a single database, providing the backbone for financial reporting and business planning.
It involves dealing with a mountain of paperwork, although some accountants, like Alchemy Accountancy, use digital tools to keep things orderly.
A good bookkeeper will be careful and organised, and they won’t get overwhelmed when the paperwork really starts to pile up.
A number of business owners like to take on the books themselves, in which case they should be aware of a few general dos and don’ts, including:
- Don’t muddle your business and personal finances into the same records.
- Keep clear and separate records – for example, keep paid and unpaid invoices separate.
- Stay on top of the books and don’t wait until the last minute to do them.
Why should I hire a bookkeeper?
You might read this and think bookkeeping is something you will easily be able to do on top of your management responsibilities.
Things can easily pile up elsewhere in the business, however, so it’s not uncommon to see some creatives push the bookkeeping further back as they divert their much-needed attention elsewhere.
But if the books are neglected, you’ll effectively be doing business blindfolded, risking poor money management and decisions, and ultimately, reduced profitability.
It’s especially difficult in the project-based world of creative work, with deadlines to meet and multiple transactions and expenses to keep track of (not to mention the time you spend making sure you get paid at the end of it.)
Trying to balance bookkeeping with your other business duties can easily lead to things being rushed and errors being made, which in turn, could end up being costly for the business in the short and long run.
But with a dedicated bookkeeper you’ll be much more in control of your finances, while you can stop fixing problems after the fact and focus your attention on the elements of your business that really excite you.
Where and how can I find a bookkeeper?
You could always hire someone to perform this specific task, or give the job to an administrator already in your business.
Money is tight, however, and some creative businesses may not have the office space for an extra employee, or the time to get one trained up.
This is why it can be a good idea for some firms to outsource their bookkeeping to someone outside the business.
Some do this through self-employed virtual assistants, who perform administrative tasks for a number of clients remotely – anything from VAT returns and self-assessment to payroll and bookkeeping.
The other route for outsourcing is to liaise with an accountancy firm, which is especially effective with a creative sector specialist like Alchemy Accountancy because we can use the data gleaned from the bookkeeping to improve your business’s tax efficiency and business strategy.
Our outsourced bookkeeping process is also clear, structured and can be easily moulded to your business.
On top of that, it’s technology-led, all centred around ReceiptBank and your choice of cloud accounting software. We provide clients a login for ReceiptBank so they can easily capture invoices and receipts provided by suppliers.
This acts as a digital filing cabinet of all your records, meaning that they won’t be lost or damaged, a frustrating occurrence in paper-based bookkeeping practices.
Then, Alchemy will perform a weekly bank reconciliation for you and send a report of any missing paperwork so you can quickly dig it up.
Our bookkeeping services are open to clients local to our offices in Preston and Lancashire, and as an online service to businesses across the country. Call us at 01772 965550 or use our contact form to get started today.