As a business owner, you rely on your bookkeeper to keep your finances in order, giving you the peace of mind to focus on the core business processes. But what happens when things start to slip through the cracks? What if they aren’t quite as on top of things as you thought?
There are some common red flags that might indicate your bookkeeper needs some extra support, training, or even mentoring. If any of these sound familiar, it might be time to get in touch.
1. Financial information is a black hole
Your financial information should be readily available and up to date. If you’re constantly chasing reports or finding that the numbers just aren’t adding up, it’s a major warning sign. A good bookkeeper ensures your Xero account is a source of truth, not a source of frustration.
2. Bank reconciliation is a last-minute scramble
Reconciling your bank account shouldn’t be a fire drill. This crucial task should be done regularly to ensure accuracy and catch any discrepancies early on. If your bookkeeper only reconciles when absolutely necessary, like before filing taxes or facing a cash flow crisis, it’s a sign that things might be slipping.
3. VAT returns are a recurring nightmare
Is each VAT return is a mini crisis with catching up and filing right up to the deadline with little time for sense checks? A capable bookkeeper will ensure your VAT records are meticulously maintained, allowing for a smooth and stress-free filing process. Constantly playing catch-up and filing at the eleventh hour leaves no room for error and can lead to costly mistakes.
4. Tax bills are an unpleasant surprise
Tax bills, especially VAT, shouldn’t come as a shock. Your bookkeeper should be able to provide accurate forecasts and help you manage your cash flow to avoid any unexpected financial burdens. If you’re constantly being caught out by tax demands, it’s time to investigate.
5. Bank statements are your only financial guide
Relying solely on your bank statements to gauge your business performance is like driving with a blindfold. Your bookkeeper should be able to provide you with insightful reports and analysis, giving you a clear picture of your financial health and helping you make informed decisions.
6. Outstanding invoices gather dust
Unpaid invoices can severely impact your cash flow. Your bookkeeper should have a system in place to track outstanding debts and follow up with clients promptly. If you’re noticing a pattern of forgotten invoices, it’s time to address the issue.
7. Unpaid bills linger in Xero
Just as you need to chase payments, you also need to stay on top of your own bills. An efficient bookkeeper will ensure that your bills are paid on time, avoiding late fees and potential damage to your credit rating. If your Xero account is littered with overdue notices, it’s a cause for concern.
The underlying issue: lack of trust in your data
Ultimately, many of these red flags point to a lack of trust in the completeness and integrity of your financial data. This often leads to business owners avoiding their accounting platform altogether, compounding the problem.
What can you do?
- Communicate: Talk to your bookkeeper about your concerns. Perhaps they need additional training or mentoring to improve their skills. My years of experience in business and accountancy practice have helped me realise that many bookkeepers aren’t bookkeepers at all, they have often just fallen into the job by default and need some guidance and support to help them help your business.
- Invest in automation: Xero offers fantastic tools to automate tasks and reduce manual errors. Ensure your bookkeeper is using these features effectively. Hydref Accounting’s review and recommend service is your first call to understand what extra features you should be using and implementing them effectively.
- Consider extra support: If your current bookkeeping arrangement isn’t working, consider my Fractional Finance Director service, I can spend as much, or as little time in your business as you need to help you take the next step in improving your accounting.
Working with Hydref Accounting gives you a trusted advisor by your side, guiding you through the complexities of financial reporting. It’s about using my years of experience to transform challenges into opportunities, unlock hidden value, and propel your business towards sustainable success. It’s about recognising that finance is not merely a support function, but a strategic driver of growth. Whatever your needs I can help you move your business from surviving to thriving. Get in touch on 03333 449270 or book an appointment through my Calendly link.
