Why Small Businesses Need Bookkeeping the Most
Written by Bindi Gethen
Small business owners typically walk on a tightrope without a safety net. One false move, one missed receipt, or one “oops, forgot to record that transaction,” and they’re tumbling into financial chaos. While the big corporate guys can afford a misstep or two, cushioned by their vast resources and in-house financial teams, the little guys can’t.
So who needs bookkeepers most? Small businesses need bookkeepers to keep a close eye on cash flow, making sure that there’s enough cash on hand to cover upcoming expenses and to highlight any potential issues. Mistakes can also be costly. Even a small error can end up being expensive, whether it’s in penalties, missed opportunities, or just bad business decisions. Bookkeepers can help catch and prevent these mistakes.
With clean books and a clear financial picture, it’s easier to plan for your brand’s future, whether you’re considering an expansion, a new product line, or just forecasting for the next year.
While you’re incredible at what you do, you don’t have to do everything yourself. Just like you might hire someone for marketing or sales, a bookkeeper is there to support you in their area of expertise.
Other industries that outsource their bookkeeping arm are:
- Real estate businesses
- Retail stores
- Restaurant industry
- Insurance
- Manufacturing
- Healthcare providers and pharmacists
- Universities and educational institutions
Who needs bookkeepers most?
Small businesses really do benefit a lot from virtual bookkeeping services. Starting and running a small business is already a massive undertaking. Entrepreneurs wear so many hats – from product development, marketing, customer service to everything in between. And amidst all that, managing finances can often feel like learning a foreign language. That’s where bookkeepers come in.
Picture this: You’ve just opened up your dream café. Between sourcing ingredients, training staff, and getting the word out on social media, you’re swamped. Now, at the end of the month, you’re handed a box of receipts, invoices, and financial statements. It’s all so intimidating. That’s where a bookkeeper can be a lifesaver.
Bookkeepers make sure you know where every penny is going. They’ll help keep things organised, so when tax season rolls around, you’re not pulling your hair out.
Beyond just the day-to-day, having a bookkeeper can give small business owners peace of mind. They can catch errors early on, provide insights on cash flow, and help businesses make informed decisions. When a business is in its early stages, having that financial clarity can make all the difference between growing and going under.
Related articles:
Should a Small Business Use a Bookkeeper All Year Round?
How Much Should a Small Business Spend on Bookkeeping?
Other industries that outsource their bookkeeping function
1. Real estate businesses
Buying, selling, renting – it’s all a whirlwind. Imagine being a real estate agent, focused on closing deals and suddenly you need to go through a myriad of transactions, like property acquisitions, sales, rental income, maintenance expenses, and so on.
Many agents, brokers, and property managers prefer to focus on selling or managing properties rather than diving deep into financial records. An external bookkeeper or firm can help track commissions, manage escrow accounts, handle property management finances, and ensure all the tax-related details are in order.
2. Retail stores
It’s Black Friday. Lines are out the door. Sales are through the roof. But who’s keeping tabs on those transactions, returns, and inventory? Of course, none other than your trusted bookkeeper.
Retailers, whether it’s a brick-and-mortar store or e-commerce, have a ton on their plate – inventory, sales, returns, discounts, and promotional campaigns. These details can become overwhelming, especially during peak seasons. Outsourced bookkeepers can be an asset as they offer specialised knowledge in handling things like inventory accounting, sales reconciliations, and more.
3. Restaurant industry
Think about your favourite diner or restaurant. Behind that delicious meal is a ton of logistics. So much goes into putting food on the table – from daily sales, fluctuating ingredient costs, employee wages, to unexpected expenses (like that sudden fridge repair). Outsourcing the bookkeeping can streamline all these variables.
A good virtual bookkeeper can keep tabs on the daily sales vs. expenses, help with payroll, and even give insights on where the money is going (e.g., if too much is being spent on a particular ingredient or if a particular day of the week is exceptionally profitable). This is crucial in an industry where margins can be tight.
4. Insurance
The insurance industry deals with a plethora of data and financial transactions on a daily basis, from policy premiums to claims and commission payouts. When an insurance company or agent outsources their bookkeeping, they’ll get the help they need to navigate complex commission structures and industry-specific regulations.
5. Manufacturing
Ever wondered about the journey of your coffee maker or smartphone before it reached you? Best believe that it had to go through a mountain of invoices and costs. Manufacturing businesses often juggle complex inventories, raw material costs, machinery maintenance, and labour costs. That’s why many of them avail of bookkeeping packages so that they can spend their time focusing on production efficiency and quality.
6. Healthcare providers and pharmacists
The healthcare industry has its own set of unique financial intricacies (e.g., billing multiple insurance providers, managing patient invoices, tracking pharmacy sales and overhead costs).
At the end of the day, healthcare providers and pharmacists got into their field to help people. Having a bookkeeper allows them to focus on patient care rather than getting bogged down with financial paperwork. There may also be specific deductions available for healthcare professionals, like equipment depreciation or continued medical education. A knowledgeable bookkeeper can ensure they’re taking advantage of these.
Pro tip
Just like the rest of us rely on healthcare pros to take care of our health, they can rely on bookkeepers to keep their practice's financial health in tip-top shape. It’s all about teamwork and playing to each person’s strengths.
7. Universities and educational institutions
Campuses are huge. Think about it – there’s tuition, housing fees, dining services, grants, donations, salaries and benefits… the list goes on. Bookkeepers ensure this money is tracked properly, spent correctly, and that all reporting requirements are met. We wouldn’t want that grant money to get mixed up!
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Price It Right: The Best Pricing Strategy for Your Small Business
Invest in the best bookkeeping arm in Australia
You can’t do everything. Especially when “everything” includes deciphering a mess of numbers, invoices, and receipts after a long day hustling for your business. You need a sidekick, someone – or something – to have your back. And not just any random accountant you found on a Google search but a tried-and-true expert.
If you’re in Australia, well, you’re in luck. The Bookkeeping Studio is not just another cookie-cutter bookkeeping service. While big firms might do the job most of the time, there’s something about our personal touch that makes all the difference. We’ll make sure you see the long-term benefits of a more customised approach. Check out our bookkeeping packages for small business owners today.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
