Posted on

Best to use your Accountant’s Bookkeeper or hire a junior to save money?

Junior level 1 bookkeepers good cheap local bookkeeping services - Natbooks

What’s Your Bookkeeper Preference?

Recently, I wrote that a lot of bookkeepers are losing out to accountants because business owners prefer the cheapest and easiest way to stay compliant. Rather than employing a bookkeeper AND an accountant to lodge their tax returns and activity statements, many business owners choose to hire an accountant only so they can deal with just one person but are they really getting value for money? When it comes to finding a good bookkeeper at this skill level business owners have the choice of hiring: 

  • Registered BAS Agents,
  • Their accountant’s internal bookkeeper,
  • An external, independent finance manager

Many good bookkeepers these days have trained as qualified BAS agents, which allows them to complete and lodge activity statements for their clients and other BAS services. The skill sets of a BAS agent and an accountant performing BAS tasks are the same, so they usually charge the same, but does your accountant really do your BAS or basic bookkeeping work?

Accountants perform higher level duties, such as financial planning, and their fees for this service are inline with what some experienced finance managers charge but when it comes to basic bookkeeping tasks they often hire a junior bookkeeper and charge them out at a lower rate but this rate is often much higher than if you hired this type of bookkeeper directory – so what are you paying for?

Pay for what you need, not what you don’t

Junior level 1 bookkeepers good cheap local bookkeeping services - NatbooksThink about your business needs. Most micro and sole trader businesses will rarely need the expertise of an accountant. But hiring one means that you’ll need to stay on top of your bookkeeping (reconciling your account, etc) because accountants won’t perform these tasks — they may outsource it, which can be costly because your accountant will be managing the bookkeeper and adding a margin to their rate as a management cost.

These businesses should instead hire a BAS agent, who can also perform bookkeeping work as well as lodge activity statements and in this situation they could just use a tax agent like ITP or H&R Block. Depending on the amount of work to be completed you could directly hire a junior or Level 2 bookkeeper and have that person perform a lot more of the bookkeeping function and office administration work and with cloud-based software like Xero & QuickBooks and Office productivity tools like Google G Suite the work can be done remotely.

If you want someone to manage all of your finances — keep track of inventory, credit management, etc — and also provide financial reporting and planning services, a finance manager is the way to go as this person can also provide guidance to your office admin and junior bookkeeping staff. 

Who does an EzyLearn course?

Lots of EzyLearn students complete an MYOB, Excel or Xero course because these software programs are demanded by employers, but we also receive enrolments from lots of bookkeepers and accountants who want to learn the cloud-based accounting software programs as well as up-skill in MS Office and Digital & Social Media Marketing. If you are a bookkeeper or accountant and need CPD courses check out our Bookkeeping Academy.

Start a bookkeeping business and work from home

Every business needs a good person with numbers and many small businesses and startups are focused on what they do best – and it’s rarely accounting. Learn about the bookkeeping business startup options..

ref:#713

 

Posted on

Accounting Software or ERP System?

enterprise resource planning systems learn myob xero quickbooks online training course videos

Are you BIG enough yet?

I’VE BEEN IN BUSINESS since my early twenties but it wasn’t until my late twenties that I had any clue about how larger companies use and pay for software. I was going through the process of selling a water filter business that I’d been operating in Sydney’s Dee Why when I had the pleasure of meeting the owner of Fountainhead Water Company, Mark Darling.

Fountainhead used a specialised accounting system for the bottled water business which did everything from receipts for each delivery to capturing bottle deposits, tracking rental coolers and more — and they were paying hundreds of dollars per month for this software. It was a far cry from purchasing the MYOB software for a couple hundred dollars and NEVER upgrading (no payroll at the time).

Now I understand the importance of Enterprise Resource Planning (ERP) systems and how they are almost sewn into the fabric of the procedures for medium to large businesses. I was contacted by someone at Sage, asking if EzyLearn had ever thought about offering training in Sage One, their software for their smaller clients. I replied by saying: “Yes, but what is the demand?” I never heard back from this person (might be a good tactic for you if you get too many cold calls!)

SAP one can cost you $600 per month so don't complain about $70 per month for Xero

Getting Setup Using an ERP System

This Sage person piqued my interest so I did a bit of research.

I soon realised that these ERP systems are sold almost exclusively through ‘integrators’ or channel partners who visit your business and really get into the nitty and gritty of the procedures and processes.

They perform their analysis and then set about a plan to implement the new software in the business using deft project management and people skills to CHANGE the way the business works.

These ERP system integrators get very involved in the operations of these larger companies and they get to see the BIG mistakes that small businesses make when dealing with them and know how easy these problems are to fix.

One such person is Carmel Crane, Finance Manager and ERP Specialist at National Bookkeeping, with specialist knowledge of midsize businesses in the mining and related industries. Carmel points out that tier one ERPs, such as SAP, JDE and Oracle are “large, expensive and all-encompassing software systems that tend to be implemented by large, multi-currency organisations.”

In a way, even small business software programs like MYOB, Xero, QuickBooks are ERPs but no one really uses that term and the process of getting set up is often much less formal and done by a high-level bookkeeper like a Finance Manager or accountant. 

The most interesting aspect of my research was when I came to the site of Leverage Technologies and found their sign up form for Sage One. I thought back to those days of working with Mark Darling, but more importantly, how true ERP systems don’t just do invoicing and payments but manage:

  • job costing
  • distribution
  • e-commerce — and even —
  • CRM.

These are services that “integrate” with software like Xero and Quickbooks.

What are tier one and two ERPs?

When you start delving deeper into ERP’s you realise there are different tiers of software which depend on the size of the company using them. Tier one ERPs are relatively inexpensive but fairly flexible applications that enable small businesses to manage their accounting and operational needs. But larger midsize businesses will have different needs that will exceed the capabilities of a tier three software like MYOB or Xero.

“Tier two is aimed at mid- to -large companies — I have a lot of mining companies in this space,” she tells EzyLearn, “and would include [software such as] Pronto, Sage and Green Trees.”

“This software has more modules than tier three, but it’s not as complex as tier one. Tier three is for small businesses, [and they] focus on the accounting side of business with simple relationships across modules.”

Tier three software is for small business and focuses on the accounting side of business.”

— Carmel Crane, ERP Specialist, National Bookkeeping

How to know if you need a tier one or two ERP? 

Any midsize business — so if you’re running a mining company, a substantial wholesale business or manufacturing or retail business — would need to work with at least a tier two ERP. And for the implementation of a tier two ERP like Sage or Pronto, Carmel strongly suggests engaging the services of an ERP specialist rather than just seeking input from the ERP company. 

“An ERP specialist understands the relationship between the modules,” Carmel says. “They can direct you in how purchasing will affect inventory and how plant maintenance will affect asset values — there is a holistic view of transactions.”

“And they know that when a problem occurs, a simple fix may just cause further error down the track. It’s important to understand the big picture.” Carmel Crane, ERP Specialist

Selecting the right ERP for your business

Just as small businesses would select a tier three ERP based on their requirements and the cost of the system, businesses selecting a tier one or two ERP do the same.

“The software is selected based on requirements, scope and cost,” Carmel notes. “Coca Cola are likely to run SAP or JDE, whereas a local operation with branches across Australia is more likely to go with Pronto or Sage.”

But she adds: “That said, just to contradict myself, I spoke with a company last week that had received an implementation quote from JDE for $1.8 million, and when I asked Pronto for the same requirements, they came back with a ballpark of $1.6 million. However, the quotes were for 30 licenses; most mid-range businesses will only use 10-15 licenses, so it would cost less.”

***

To select the right ERP — and for the right price! — engage an ERP specialist. Their knowledge of how various elements of your business operations — inventory or machinery maintenance — will affect your business, combined with their in-depth knowledge of ERP systems make them an invaluable resource.

Carmel Crane ERP Specialist National Bookkeeping_3_comp

How to find an ERP Specialist

Carmel Crane specialises in ERP systems for businesses in the mining and related sectors. Her knowledge of Xero & MYOB enables smaller businesses to get set up and systemised so they are better equipped to deal with larger clients.

She is also available for face to face training in Xero & MYOB.

As a Finance Manager, she works with businesses in the Atherton Tablelands, Cairns, Chillagoe to Charter Towers regions, Dalby through to Dubbo (including Broken Hill, Cobar and surrounds), and the Riverina, Wagga Wagga and Wyalong areas.

Carmel is looking to expand her list of clients in these and surrounding areas. If your business is in need of an experienced finance manager for managing Xero or MYOB or even a mid sized business looking for an ERP specialist, you can contact Carmel through the National Bookkeeping website.


 

Posted on

How Bookkeepers Can STOP Losing Out to Accountants

Junior level 1 bookkeepers good cheap local bookkeeping services - Natbooks

Or is it just BAS Agents who are losing out?

Good experienced Xero, MYOB Finance Manager and bookkeeper for local bookkeeping - Natbooks LogoTHE BURDEN ON Australian small businesses to stay compliant with the ATO is immense. A lot of that is to do with the Government not distinguishing between a small business with upwards of 20 staff, and a micro business which may have 5 or fewer staff — sometimes even no staff.

All of this compliance — bookkeeping, activity statements, payroll, superannuation, and so on — is costly and time consuming, so most business owners outsource this work to a professional contractor. Before the Government changed the tax laws, it was bookkeepers who small or micro business turned to.

Prior to 2010, a bookkeeper could complete and lodge your BAS and tax returns without needing any formal qualifications — that’s since changed.

Accountants kill two birds with one stone

Even though few small or micro businesses actually need the services a financial accountant provides — financial planning, say — a lot of tax accountants are picking up clients that would have, prior to the law change, gone to a bookkeeper, and it’s usually because they are scared of getting something wrong and then getting slapped on the wrist about it. 

Small businesses (SME’s) want the cheapest and easiest way to stay compliant, and dealing with one person is easier than dealing with multiple people, especially if there are any issues with how one person has worked, and the business owner winds up stuck in the middle.

If a business is large enough, a Finance Manager can be employed to systemise the work and then manage the low cost junior bookkeeper, and the accountant and provide the business owner with the results and reports they need and want. 

[box] In the new bookkeeper induction for new members of National Bookkeeping we take students through the formalities of signing up a new client, defining the type of clients they want and the category of bookkeeper they want to be and we find it helps them get into the systemising mindset.[/box]

 

BAS agents and accountants charge the same

If you’re only hiring an accountant to complete and lodge your activity statements, they’ll only charge you to do that. This rate is similar to what most BAS agents charge, only BAS agents generally charge a lot less for bookkeeping tasks, while in my experience accountants charge BAS service rates for more junior bookkeeping tasks.

If you’re only hiring an accountant to complete and lodge your activity statements, they’ll only charge you to do that. This rate is similar to what most BAS agents charge, only BAS agents generally charge a lot less for bookkeeping tasks, while in my experience accountants charge BAS service rates for more junior bookkeeping tasks.

Junior bookkeepers can win business they’d normally lose to an accountant by becoming a qualified BAS agent, or going to work for an accountant where they’re allowed to perform all of the bookkeeping and BAS work because they’re being “supervised” by an accountant.

Finding the middle ground

The middle ground for people who want to start their own bookkeeping business and become a contract bookkeeper is often to perform bookkeeping tasks that involve more than just data entry, but less than the tasks covered under the tax act as a BAS Service, like credit management. It’s also important to be emotionally intelligent.

This involves data entry and accessing customer information but also communicating with late payers, difficult customers and problem solving for complex sales transactions. This work requires a bit more bookkeeping experience AND life experience and it’s very important to the financial health of the business.

***

To learn more about the kind of accounting professional your business needs, visit the National Bookkeeping website.

You will find a number of professionals — from bookkeepers to BAS agents, to Chief Financial Officers — who can provide the right accounting services for your business at an affordable price.