Appreciating the bookkeeper

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The unique skills offered by bookkeepers are often overlooked in the business world, but the fact remains that hiring a good bookkeeper can sometimes mean the difference between the success or failure of a company.

Kristina Parslow founded Paperwork Genie, which offers bookkeeping services to small and medium-sized businesses, after she witnessed her mother struggle to keep her company afloat.

“During a meeting with her traditional accountant to discuss her year-end accounts, she was informed that the business she had been building for 16 years would ‘go under’ unless she made some changes quickly,” Parslow explains on her company website.

“Unfortunately, this conversation came nearly a year after the end of the year those accounts related to and the business couldn’t be turned around in time. Even though I was still in training at the time, I know that more could be done to support businesses like my Mum’s.”

Parslow’s firm specialises in using Xero and cloud accounting systems to offer quick access and analysis of management accounts data, to help companies make informed decisions about how to proceed, and as an early warning system if something is going wrong.

“I basically wanted to give smaller businesses the same opportunities that big companies have,” she said in an interview.

Saving the day

“The biggest thing that I say to clients is that [bookkeepers] stop nasty gremlins. So if something is gradually getting horrible [a bookkeeper] can catch the gremlins quicker before it becomes like a nasty monster that shuts your business down,” Parslow added.

“I think bookkeepers are massively undervalued. A good bookkeeper is equally as important as an accountant,” she continued.

“A bookkeeper gets your cash in on time, you know where you’re at, you’re not burying your head in the sand. Let’s say you get the opportunity to buy a second branch, then you’re in a position to make those decisions because you know if it’s possible or not possible,” Parslow argued.

“Your numbers should be one of the most important things in your business and I think accountants do it at a point in time and are often quite behind, whereas a bookkeeper does it weekly or monthly so it’s much more useful for a business.”

Embracing new technology

Parslow’s own practice focusses on clients with VAT returns of about £20,000 a quarter, helping them to keep on top of the numbers and “avoid nasty surprises” through the most up-to-date online technology.

She sticks strictly to clients willing to embrace cloud software, as it saves both her and them time and money.

“If you have a client who isn’t embracing technology, it takes my bookkeepers a lot longer to do stuff so I don’t feel that I should take the hit for someone else not being organised,” she explained.

“I’m really passionate about small businesses, and I think that if technology can help me then it can help the business as well,” Parslow said. “So I basically say if they embrace technology as much as me I will charge hourly, so the time that I save, that cost saving gets passed onto the client.”

Utilise their skills

Sarah Wallis, who works at Sandra Silk Bookkeeping in Salisbury, cautioned that technology should be used in conjunction with a bookkeeper qualified to handle it in the right way.

“A lot of the new software at the moment makes it look easy, and their adverts are geared up to say ‘you can do your accounts in minutes’,” she said.

“But if you don’t know what you’re doing then it’s very easy to put things in the wrong VAT code or put expenses into asset codes, which can end up costing the business more money,” Wallis continued.

“A lot of people are saying we’ll do it ourselves. The software comes with a lot of videos and tutorials.. but again, it’s about going back to qualifications and understanding and if you don’t have the basic understanding behind it then it’s so easy to make mistakes.”

Wallis explained that she frequently saw businesses getting things wrong when they did their bookkeeping in-house.

The most common mistakes were inputting things with the wrong VAT code, putting expenses into assets and generally inputting the wrong nominal code, or even using the wrong bank account.

“All those things would give the wrong image of how their business is doing,” she said.

“We’ve seen accounts that are a complete mess and in those instances, if you try to pull reports like profit and loss or a balance sheet to gauge the current state of the business, you’d have completely incorrect figures,” she warned.

Show them the money

“So one of the other advantages to having a good bookkeeper is that you can keep an eye on things as you go along and keep on top of it so that a business owner can have a proper accurate view of how their business is doing so that they can make better decisions for the future.”

On a brighter note, Wallis cited a recent example where she was able to help turn around a business that was making losses by using her bookkeeping skills.

“There’s a company I’ve been working with where I could see that they were consistently making losses, and so I made spreadsheet for them each month where they could compare their income and expenses,” she said.

“I went right back three years, and made it into a chart so it really identified where their costs had gone up in the last few years, and where their income had stayed quite level. Obviously in those situations then your bottom line is going to suffer,” Wallis continued.

“As a result of that they’ve now put budgets in place and are monitoring their costs every month and now know exactly how much they’re going to spend on everything and it’s actually turned their business around,” she said.

“Without that piece of work they wouldn’t have been able to see what was happening to cause the losses that they were encountering.”

Nicola Smith has spent a decade reporting for The Sunday Times on both the European Union and South Asia.

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