Cloud accounting software’s greatest innovation was not putting the software in the cloud; it was introducing bank feeds. You’ll learn how to set up bank feeds in the latest version of Xero in our Xero Bank Reconciliations and Journal Entries course. For now however, we’re going to explain why you should — whether you’re a business owner doing your own bookkeeping or whether you’re a bookkeeper employed to do it for your clients — be using bank feeds.
Bank feeds in brief
A bank feed is an automatically created list of the transactions (spent and received) in your bank account that is imported into your Xero accounting software. For this to occur, you have to give Xero permission to access your account. Some people feel funny about this, but bank feeds have been around for so long now that, just like online shopping, there’s really nothing to worry about. I won’t go into how the technology works, but I will say that no one looks at your account data; you’re just allowing the free flow of information between your bank and Xero.
Direct bank feeds save time (and indirectly, money)
There was a time when you or your bookkeeper had to wait until your bank statement arrived before any transactions could be reconciled in your accounting software, usually at the end of the month. For businesses with a lot of transactions, either in the form of receivables or payables or both, reconciling a month’s worth is a finicky job that’s prone to errors.
With bank feeds, transactions will show up in your accounting software as soon as the payment leaves your account or credit card. If you (or your bookkeeper) get in the habit of reconciling your account on a daily, twice weekly or weekly basis, it makes it easier to accurately code each transaction because you’re only dealing with a few at a time. This results in fewer errors and fewer hours spent fixing them, and that saves money (read: time = money).
When it comes to working out fees, most business owners go: “Well, the average market rate for my profession is X per hour and this job should take around Y hours” and off they go and give their client a quote that, in today’s small business parlance, is frequently referred to as being a fixed-price quote or the project fee.
This would be fine except that you’re essentially working on an hourly rate, without the benefit of being able to charge the client if you run over your allocated timeframe.
Quite simply, this is an inefficient way to set prices for your business. It’s an even more inefficient way to quote clients, because you’re either going to rush through their work in order to make it cost effective for you, or you’re going to increase your prices the next time around. Instead, you should factor job costings — that is, how much it will cost youto complete the job — into your prices. Here’s how:
Working out the direct costs of each job
This seems obvious, but countless new and established business owners overlook the direct costs of their services when setting their prices. Ask yourself how much, in a take home hourly rate, you can reasonably live on — is it $20 an hour? $25? $30? $35, perhaps?
Once you’ve settled on a rate, you then need to add in all the other costs associated with being employed in Australia. Tax is a big one. If you’ve been working for a while, you should have a fairly good idea of how much you will pay in tax based on how much you paid last year. If you’ve just started out, try and base it on an average number of hours you’d like to work per week for the next 12 months. Got that figure? Now go onto the ATO website and work out the rate of tax you’ll pay for each dollar you’ll earn. Add that to your hourly rate.
Do the same for sick leave, annual leave and superannuation, because if you’re going to work for yourself, you should have the same benefits as you would as an employee. Now add those on top of your hourly rate.
Working out the indirect costs of each job
We’re still not done with that hourly rate yet. It’s now time to work out the other costs, like wages office expenses. Think about the services you provide and what they entail. Is there travel involved — to your client’s office, for example — because you should add that in. Allocate both the time to get there and the approximate cost in mileage (note: some invoicing software, like QuickBooks’s self-employed app works out the cost of your business travel based on the ATO’s tax rates to give you an approximate dollar figure for each business trip you make). Also factor in other costs, such as parking, even though it’s a tax deduction, and add those costs to your hourly rate.
Nowwork out your fixed-price quote or project fees
Your hourly rate will now be significantly higher than the amount you need to live on, and it may even be higher than your competitors, but that’s okay. You’re not working on an hourly rate, remember. You’re creating a fixed-price or project fee, so you can choose to itemise your project fees however you like in the estimate you provide to clients. For example, if your hourly rate is now $50 but your competitors charge $35, take $15 for each hour you’ve allocated to the project and assign it as some other ancillary task. This is precisely how manufacturing businesses set the prices for the products they sell, and it’s no different for businesses, like law firms and advertising agencies, in the service industry.
Learn how to set the correct prices for your business, plus everything else you need to know about starting and operating a small business in our EzyStartUp Business Course. Visit our website for more information and to view all of our special offers to save money on your next EzyLearn training course.
Identify yourself: As a contract bookkeeper, your identity is your brand. Create a website or LinkedIn profile (or both), and include a picture of yourself. If you’re operating a business, don’t hide behind your business name. Include pictures of your team, even if that’s just you at this stage.
Educate with video: Show prospects that you know your stuff, by creating short videos explaining common issues businesses may have using MYOB, QuickBooks, Xero, etc. You may also create video tutorials that explain how you like clients to set up MYOB, Xero, QuickBooks etc.
Capture the local scene: Establish yourself as a local business, by taking photos when you visit a local business (whether it’s a cafe, hardware store, or clothing shop) and put them on social media. Be sure to connect with those businesses on social too, so they can share with their customers. Do the same with your clients. It’s a good way to establish firm connections with the businesses you work with, and to update them on your other business projects.
Using video and images to build your online presence should be part of your broader marketing strategy.
Our EzyStartUp Course covers researching the market, setting prices, and an introduction to marketing and business planning, plus much more.
We recently wrote about how QuickBooks uses the SuperStream-compliant service KeyPay to deliver payroll services because QuickBooks itself isn’t actually SuperStream compliant. Currently, the payroll feature in QuickBooks is free for all Small Business plans, as the company further positions itself as the low-cost accounting software option for Aussie small businesses.
The beauty of content marketing is that, as a system to source new leads, you can cover all the steps of the selling process without it seeming like a chore and, best of all, without feeling “salesy”, cheesy or inauthentic. It’s focus is about the potential client — it’s about providing them with relevant information that will benefit them — not ramming a sales pitch down their throat.
Good sales people realise that sales and the very process of selling is not about just “closing” a sale. Rather, it’s about understanding what the customer needs, seeing if your product is a good fit and then offering a solution to a customer’s problem.
How much of sales is Content Marketing?
To this end, content marketing is about 80% of the selling process or 80% of the sales funnel (as corporate sales people like to call it).
This is because content marketing involves information gathering; it involves seeing if your product and YOU are a good fit for your client.
These are the content marketing stages:
creating relevant and interest website content
‘call to action’ that results in email or mobile number capture
email or SMS marketing
social media profiles to engage with your prospects
CRM’s to manage the final parts of the selling process.
When you implement these systems you can sit back and watch it work and then focus on your conversion rate or what industry experts call CRO – Conversion Rate Optimisation.
Do you really want to be an online marketing professional? Let us manage it for you
January, February and March of a new year, which is typically the quietest as people take a while to adjust to the work and school routine, is when a lot of businesses spend time setting goals for the year ahead.
Just as individuals set their own personal new year’s resolutions, many businesses use January and February to set some new year’s resolutions for their business’s marketing activities.
Great Content is Like an Equilateral Triangle – All the Sides are Equal
As popular as content marketing has become in the last few years, many people still don’t quite understand that great content marketing requires you to pay equal emphasis on each component. This includes the word content itself in an ebook or enewsletter for instance, but also the layout and design, the SEO etc. It also needs to be free of typos!
I know, in the past, I’ve probably been guilty of rushing to publish content on our website because I’m so eager to share what we’ve created with you. But for content marketing to be successful in the long term, it needs to be approached holistically. In other words, the copy is equally as important as the design and the layout; the messages need to be consistent and you need to keep communicating with your customers — it can’t be hit and miss. Just as every side in an equilateral triangle must be created equal, so too do you have to consider all components equally when content marketing.
Outsourcing is Okay
As a small business, you probably have at least one person in your team who is either a) design inclined; or b) a good, strong writer. If you’re really lucky, you may have both, but it’s not uncommon for a business to need to outsource part of this work to a professional, usually on a contract or freelance basis.
Take stock of the talent you have in-house already. If you have a competent designer, utilise them and outsource the writing to a professional. It’s unwise to try and do everything yourself. Producing high quality content is a time-consuming process, made even more so if there’s a particular aspect of it — the writing, say — that you’re not proficient at.
I would say that most business owners do most of what I would loosely term ‘designing’, themselves, which in the case of blogging is choosing an image that accurately reflects the message you’re trying to communicate in the main copy.
Think Outside the Stock Box When it Comes to Photos for Your Blogs
There is a certain art to selecting images for your blog. You want to avoid using ones that every other blogger is using, which means ditching your regular Google Images haunt and using a stock library instead. But this is where you need to do your research.
Many free stock libraries serve up the same images that you find in Google Images, which brings you back to square one. They’re also incredibly boring. At this point, next logical option probably seems like paying for a membership to a stock library.
Again, research is required here. Not all stock libraries, even paid ones, are created equally. Well known libraries — iStock Photo, for example — are expensive, while the other, lesser known ones are still boring. So what’s a content marketer to do? Get creative.
Remember, content marketing is about creating original, high quality content that’s relevant both to your customers and to your business. With this in mind, rather than paying for expensive stock photography and images, why don’t you take your own? There’s nothing more original and relevant to you and your customers than your own photography.
Publishing original content on your blog and website, whether it’s in the form of images, copy or videos (or all of the above), the harder it will work at driving your search engine rankings, while, at the same time, the personalised approach will have a longer lasting impression on your readers and customers.
Prioritise Content Marketing in 2017
Bookkeepers especially — take note!
If you’re a bookkeeper looking to start your own bookkeeping business and find yourself clients, or grow you list of clients, and content marketing isn’t already on your agenda for 2017 — it should be.
In terms of having the experience and know-how to content market to people we know what our students need to be successful to this end, after all, most EzyLearn students use our services for MYOB Training Courses, Excel Training Courses, Xero Courses and Small Business Management Training because they’re looking for bookkeeping work or want to start a bookkeeping business. Very early in the piece we started finding out why our students did our courses because it enables us to develop targeted products (and write content about) what they need.
Join our Bookkeeping Directory TODAY
We’ve launched a new bookkeeping directory which is aimed at helping people (our students primarily) find bookkeeping work or start a bookkeeping business, but it’s also a great way for small businesses to find bookkeepers who are close to them. We’re also taking registrations for our content marketing online course.
If you’re interested in content marketing, either for your business or because you’d like to become an independent contractor offering content marketing services to other business, you can learn more by subscribing to our blog.
Be Aware of the Ebbs and Flows of Your Business: Multi-Period Profit and Loss Reporting
Nearly every business has its busy periods and its quiet ones. Crucial to the success of a business is knowing when these busy periods and quiet ones occur, so you can capitalise on them. For a lot of Australian businesses offering professional services, December through January is usually when business winds down for the year. In the hospitality and accommodation industry, however, it’s typically the busiest time of the year, so planning for increased business is essential.
Muriel, a bookkeeper based in Dee Why, in Sydney’s northern beaches, encourages businesses to run a multi-period profit and loss (P&L) report in their accounting software in order to best determine these trends and to plan for them. Previously, this function was only available in MYOB and, in a roundabout way, in Xero, but the functionality has just recently been made available in QuickBooks, too.
Key Takeaways from P&L Statements
As the name of the report suggests, a profit and loss statement illustrates whether your business is making a profit or a loss, and for what period losses and profits were recorded. The best part about multi-period P&L statements is that you can run one report for, say, May, June and July off 2016 and, at the same time, run a P&L for the same period, the previous year.
In MYOB and QuickBooks, each month will be shown in columns next to each, so you can easily compare each one, and also look for patterns or trends in your business. It also makes it easy to identify if there were any problems that should be investigated further, because they stick out like a sore thumb. Most of the time, the issues that are turned up are the result of a keying or coding error in your bookkeeping, but occasionally, it could indicate that your business isn’t as healthy as it should be — or, conversely, that it’s outperforming your expectations, in which case, yay!
If Your Business Sells Goods
In addition to running multi-period P&L reports, inventory businesses that sell goods, should get in the habit of running inventory sales and stock-on-hand reports. These reports allow you to see how your business is performing. In particular, you’ll be able to monitor your product lines, to see what’s selling, what’s not selling, what you have too much of, and what you have too little of.
Ask your bookkeeper to run regular P&L statements and, if you’re a business selling goods, inventory sales and stock-on-hand reports, too. They’ll provide you with invaluable insights to help you better understand your business.
Precious Help Finding A Bookkeeper
Like GPs, there’s usually a bookkeeper on every corner, but how do you find someone who’s top of their game, will save you time (and very probably money) and who will be a true asset to your business? Some business owners are unsure where to start when looking for a bookkeeper they can trust and rely on. It’s also extremely concerning how many Australian small businesses suffer — to the point of insolvency — as a result of inadequate cash flow. A large portion of cash flow problems stem from credit and debt management and the systems business’ put in place to do this.
Our National Bookkeeping website has recently undergone a significant upgrade so keep a look out for more stories about featured bookkeepers in forthcoming blogs. Join now and we can feature YOU in our articles too.
What To Do So You Don’t Lose Money When Doing Your BAS
If your business is registered for GST, it means you have to file regular activity statements with the ATO, usually each quarter. A lot of business owners export their Business Activity Statement (BAS) data straight from their accounting software, like MYOB or QuickBooks, and quickly prepare their BAS’ that way. But this is an imprecise method, and one that could be costing you money.
Here’s six steps you can take for an accurate BAS:
Check to ensure all bank, credit card, overdraft, loan, and petty cash accounts are reconciled with the original bank statements at the end of every BAS quarter.
Print your monthly profit and loss (P&L) report for the respective BAS quarter, and check for abnormalities in income or expenditure over the three months. You should also compare this quarter’s P&L report with the P&L report from the previous quarter (in the same financial year), as well as the P&L report from the same quarter in the previous financial year to detect any unexpected transactions.
Print out the balance sheet as at the end of the BAS quarter. Note the balances for the wage and salary, payroll, payable, super expense and payable, and PAYG and GST accounts, and investigate any abnormalities.
Generate the general ledger exceptions report to review any abnormal transactions. This report will indicate any differences in the GST codes for the same types of purchases or sales by comparing the current transactions with previous transactions.
Print your BAS and compare with it with last quarter’s BAS, as well as the BAS from the same quarter of the previous year, and ensure that your GST, PAYG, sales, and purchases are consistent across all three BAS’.
Lodge and pay your BAS on time to avoid penalties, and remember to record the BAS payment in your accounting software.
Although this may appear to be ‘double handling’, in fact, it eliminates double handling by ensuring that the activity statements you lodge with the ATO are correct and error-free. Typically, the mistakes this method turns up are ones that would be of benefit to the ATO and not to the business owner. So rather than give the ATO more money than you need to, make sure you follow this method for an error-free BAS lodgment.
An Experienced Bookkeeper in WA
Looking for a reliable and accurate bookkeeper to manage your business’ daily or weekly bookkeeping and accounts, either in the cloud (remotely) or in-person?
Our National Bookkeeping website has recently undergone a significant upgrade so keep a look out for more stories about featured bookkeepers in forthcoming blogs. Join now and we can feature YOU in our articles too.
1. Your Bookkeeper Adds Adjustments to Reconciliations
The reconciliation is just a comparison between your records and those of the bank, so if you see reconciliation adjustments, something’s wrong. A bookkeeper should never make reconciliation adjustments, because it means they haven’t accounted for something properly and, instead of trying to find it, they gave up and made an adjustment instead. This is a classic example of why daily reconciliations are a good idea.
2. Vague Descriptions for Transactions
A good bookkeeper should know exactly what descriptions to use for each of your transactions, so if you see strange or vague ones like “opening balance??”, it’s a sign your bookkeeper doesn’t know what they’re doing. By the same token, if you see that the description field has been left blank or there are lots of journal entries, this should likewise raise a few red flags.
3. Lots of Old Transactions in Undeposited Funds Field
In most cloud-accounting software packages, such as QuickBooks, Xero and MYOB, there’s an undeposited funds account, where certain unreconciled transactions may sit. If you see lots of old transactions sitting there, it’s a sign your bookkeeper doesn’t understand what this feature is for or how to work with it, and as such, they’re manually recording deposits, which will overstate your income or sales.
If you’re seeing any of these things happening with your bookkeeping, you should speak to your bookkeeper straight away. It’s a clear sign that they don’t understand your accounting software properly, and you will pay for it later — usually when you go to see your accountant at tax time. Ensure your bookkeeper is qualified to work with the accounting package you’re using, and, ideally, that they have the equivalent of a Cert IV in Bookkeeping or higher.
Finding the Right Bookkeeper
Bookkeepers seem to be ‘ten a penny’, but like in most professions, the really good people tend to stand out. A competent bookkeeper — someone who really listens, who understands the software and who prioritises your business — is crucial to a business of any size. A quality bookkeeper will help see to it that you’re not overpaying tax and meeting your payment obligations to staff, of course, but they can also help you put in place proper credit and debt management procedures and processes, something vitally overlooked by many small businesses (and yet most small businesses go insolvent as a result of cash flow problems — many of which stem from non-paying or late paying clients).
Check out our National Bookkeeping website which has recently undergone a significant upgrade. We will keep feature more of our bookkeepers in forthcoming blogs — join now and we can feature YOU in our articles too.
Reconciling Your Accounts Daily Gives a True Picture of Cash Flow
For a lot of business owners, just the thought of reconciling their accounts once a month is enough to make them go weak at the knees, never mind every day. Yet there are plenty of contract and remote bookkeepers who work for their clients each week, and some that work every day for the same client, reconciling their accounts and providing other vital bookkeeping services.
And they’re not just big businesses whose accounts are reconciled daily — plenty of small businesses do so too. In fact, with so many small businesses going asunder due to cash flow problems (often stemming from a lack of procedures in place for credit and debt management) it can be not only a cost-saver but a potential life-saver to your business.
If you’re a small business, reconciling just one day’s accounts is a lot quicker and easier than trying to reconcile an entire week or month. There’s less potential for error, and it’s easier to resolve any issues when they do crop up because you’re not looking through days and weeks of transactions. For small businesses, daily reconciliation takes between 5 and 10 minutes; for larger businesses, it could be 30-60 minutes each day.
Improved Cash Flow Management
Too many business owners log onto their internet banking to get an idea of their cash flow, but this is an imprecise way to manage your finances. It doesn’t take into — excuse the pun — account any pending payments and, worse still, it doesn’t give you a clear idea of who hasn’t paid you yet and whether they’re late in doing so. If your accounts are reconciled daily, you can use your accounting software to get a true picture of your cash flow.
Daily reconciliation can provide you with great insights into your business’s financial future, in particular, it greatly assists with payroll. Many business owners find payroll immensely stressful, especially when it leaves their cash flow tight, due to late or unpaid invoices. If you reconcile your accounts on a daily basis, you’ll know exactly where you’ll be when payroll comes around, and whether or not there’ll be any cash shortfalls.
Payroll Plus: Bookkeeper Mandy is Available in the Dandenong Area of VIC
With so many people doing bookkeeping, how do you find someone with whom you can trust your most sensitive financial information? Do you know exactly what role a bookkeeper could play in your business? How much will they charge? Some business owners are unsure where to start when looking for a truly competent and professional bookkeeper they can trust and rely on. In finding the right bookkeeper, word of mouth may be helpful — if you can get it; some people are reluctant to even do this for fear of losing a cherished and valuable resource.
If you’re business is located in or near Berwick, Narra Warren, Harkaway, Guys Hill, Beaconsfield, Dandenong or Hallam, Mandy is a bookkeeper with over 25 years’ experience in payroll and 18 years’ experience working as a company bookkeeper/financial manager with a SME with 50 employees. You can find out more about Mandy’s credentials at her profile page. Our directory includes many degree qualified local bookkeepers, who are ready to start working with your business, in person or in the cloud.
Our National Bookkeeping website has recently undergone a significant upgrade so keep a look out for more stories about featured bookkeepers in forthcoming blogs. Join now and we can feature YOU in our articles too.
Do You Have to Drop a Client Because of a Bad Credit Check?
A Credit Check is one of the most important first steps of good credit and debt management but you can still do business if the check comes back negative.
In our previous post on credit and debt management, we recommended that all businesses — regardless of whether they offer credit to customers on a 30-day account or not — perform a credit check on any new client who will spend more than $1000 on goods or services in one sale, on an ongoing basis. But what should you do if the credit check comes back negative, and shows that the potential customer is guilty of late payments, pending legal action or already carries a significant level of debt?
It may not be a case of having to turn a potential customer away. You may still be able to offer services to the customer without the risk that they won’t pay by trying the following approach, before refusing them entirely:
Advise the Client of the Bad Credit Rating
If the client filled out your credit application or work authorisation form, which should have stated that you were collecting their information for the purpose of credit check, there may be a good chance they filled it out in good faith and they’re unaware of their bad credit rating. There may be a reason for the rating, like, for instance, that the business was recently sold. It may even, potentially, stem from an ongoing dispute with another supplier over the standard of their goods or services (although proceed with caution here, as this, too, throws up a few red flags).
Look a Little Closer
When you search deeper, you might discover that the customer experiences predictable fluctuations in trading conditions which render them more vulnerable to being cash flow poor at certain times of the year. You may be able to accommodate this in how you design your credit terms with this customer. You might also ask for a list of suppliers (ensure you get a complete list, not one that has been hand-picked by the customer to only show them in a positive light) who you can call and verify as to their likely credit risk for future.
Request Payment in Advance
This said, a bad credit rating is a bad credit rating, even if the client has a perfectly good and reasonable explanation for you. You have the upper hand here, so you’re well within your rights to only agree to do business with this client so long as they pay for your goods or services in advance.
If you’re a supplier, say, of goods and your delivery driver has the capacity to accept cash payments on delivery, you may accept COD, however it’s not recommended. If the client is unwilling to prepay for your goods or services, then there’s a good chance they’re not acting in good faith, and so you’re best to avoid doing business with them.
Need a Bookkeeper? Sydney’s North Shore
If you’re in need of some help with your own business’ credit and debt management and are seeking a reliable bookkeeper to manage your daily or weekly bookkeeping and accounts, either remotely or in-person, we are pleased to recommend Roz, a qualified bookkeeper based at St Ives, with tertiary qualifications in accounting. She is a National Bookkeeping member and comes to us with the practical experience of having operated her own business and proficient in the day-to-day accounting functions of a small business. Visit her profile page and Request a Quote for Bookkeeping Services.
Unfortunately, too many business owners feel uncomfortable talking about credit and debt management upfront with new clients.
They (falsely) believe it begins if, and when, a customer doesn’t pay a bill. But, in fact, credit management starts much, much earlier than that — long before the two businesses even agree to work with each other, to be precise.
The 3 Stages of Credit Management
Credit management falls, generally, into 3 broad stages, beginning with how new customers are assessed before you do business with them.
If you extend a line of credit to your customers, payable on a 30-day account, then a credit check is an imperative first step. But even if you don’t offer credit, a credit check should be a routine part of the new customer set-up process.
If you provide services to customers that aren’t paid for in advance or upon receipt, and you allow that customer between 14 and 30 days to pay your invoice, you’ve essentially just extended them a line of credit.
Indeed, it’s recommended that any business, whether they’re a sole trader, freelancer or independent contractor, carry out credit checks on any new, ongoing customer for jobs over the value of $1000.
Create credit application or work authorisation form
Establish terms of trade
Obtain a credit check
As long as the credit check doesn’t raise any issues of concern in relation to the business’ previous track record with paying suppliers on time, you can then decide to take them on as a client. From here you move to the next stage of credit management.
Stage 2: Management
This is the most involved stage of the credit management process, as it requires diligence to ensure your processes don’t slip. Some aspects of the management stage may require a phone call to your client to find out why they haven’t paid.
However, for the most part, cloud-accounting software has made it a lot easier to stay on top of your debtors. Ensure your process includes the following:
Prompt invoicing (as soon as goods / services have been provided)
Establish payment reminders, either by email or text
Send regular statements (if customer is on a 30-day credit account)
As soon as payment is overdue and in breach of terms of trade
Send to debt collection.
If you speak to your client twice about an overdue invoice / account, and they still don’t make payment within an agreed time, refer them to your debt collection agency, however harsh that may seem.
Stage 3: Enforcement
Although debt collection agencies can chase a debt that’s as much as 5 years old, the older the debt, the harder it is to collect payment.
As soon as a client is in breach of your terms of trade, and your other attempts to collect payment have failed, refer the debt to your collection agency.
If debt collection is unsuccessful, you should speak to your accountant or financial advisor about writing the debt off in your next tax return.
Good Credit Management Should Mean Few Phone Calls
So the upshot of all this is a big part of a good credit management process is properly vetting all new customers before you do business with them. If this is the case, you should rarely have to pick up the phone to chase them for payment.
In that sense, credit management is not about getting on the phone. Rather, it’s about implementing a range of procedures for managing your debtors, and it begins before you even do any work for them.
We Can Help You Set Up Your Credit Management and Much More
Is your business yet to set up proper credit management systems?
Having the assistance of a reliable, experienced professional to help you do so may cost a lot less than you think. We have thoroughly-vetted, reliable bookkeepers across Australia, capable of setting up your systems so you can continue to do your bookkeeping yourself, or able to keep managing your daily or weekly bookkeeping and accounts.
In your office or in the Cloud
This can be done remotely or in person, with most of our bookkeepers tertiary qualified and able to assist in basic bookkeeping to more complex accounting tasks. These might include accounts receivable and payable and payroll, or financial strategising.
We also have registered BAS agents in our national directory. See our newly upgraded website, National Bookkeeping for more information.
We made a commitment to give National Bookkeeping licensees access to our full suite of training courses because we’re big believers in continuing your professional development by constantly updating your skill set, whether it’s by learning how to use new software or getting training in new areas of study – like content marketing.
So straight off the bat, by becoming a National Bookkeeping licensee, you’re getting access to thousands of dollars worth of training courses as part of the license fee. The way we – and National Bookkeeping – see it is that the better skilled you are, the more chance your business will have at succeeding, which is a goal for both EzyLearn and National Bookkeeping as much as it is for you.
What do you get as a National Bookkeeping Licensee?
You also get the infrastructure you need to get your bookkeeping business off the ground included in the license fee. This includes:
VoIP business phone number: You can give out a landline telephone number (rather than just a mobile number) and configure it so you can use special in-dial marketing numbers to see where your calls are coming from, which is very useful to tracking your marketing activities. You can learn more about VoIP at the Virion website, who are also working with National Bookkeeping.
Business templates: Whenever you commence work with a new client, you should always have some kind of agreement in place to protect both yourself and your client. For an independent contractor – which is how National Bookkeeping licensees will operate their businesses – the most common kind of agreement you’ll use is the professional services agreement. But we’ll also give you access to other kinds of business document, such as intellectual property agreements, that can be easily modified, should you need them.
Bookkeeping business plan: In addition to the small business management course, which takes you through the process of creating your own business plan, National Bookkeeping will also provide you with an easy-to-modify business plan, developed especially for home-based bookkeepers, which you can tweak to suit your business needs.
Sales training and business coach: Even if you’ve worked in sales in a previous occupation, every new business owner can use sales training and that’s largely because as a business owner the sales process is different to when you’re working as a sales person for a large company. When you’re just starting out, the goal is to get clients – so is working for free or cutting your rates is a good way to establish yourself? The National Bookkeeping sales trainer will take you through the many common scenarios new business owners face in relation to getting clients, as well as ways to build your business through word-of-mouth referrals. You’ll also have access to your own business coach to help you keep on track to grow your client base and build a successful business.
Marketing materials: National Bookkeeping will also supply you with your own business cards, brochures, and marketing and sales collateral that you can distribute throughout your business networks and to potential customers.
What you need to do now?
Aside from registering your interest with National Bookkeeping there are a few things you will need to do in order to become a home-based bookkeeper.
Get a Cert IV in Accounting or Bookkeeping: Although you don’t have to get a Certificate IV in Accounting or Bookkeeping, we highly recommend it. Without a Cert IV, you cannot provide BAS or GST services, which are a major component of the tax process. By being able to provide these services, you make yourself infinitely more valuable to your clients, as well as accountants with whom you’ll be encouraged to network and make contact with. You can get a Cert IV in Accounting or Bookkeeping from most RTOs or TAFE.
Obtain an ABN: Every business must have an Australian Business Number, which must be quoted on your invoices. If you don’t have an ABN your clients are legally required to withhold 49 percent of your payment and send it directly to the ATO, who’ll hold it until you file a tax return for which you’ll be required to get an ABN. Thus, it’s better to get one before you commence trading.
Get in the zone: The decision to start and operate a new business is not one that should be taken lightly, so it’s a good idea to get mentally prepared beforehand. Read up on what it’s like to be a home-based office worker, get on Meetup.com and do some networking with other business owners who can share their tips, advice and wisdom on the new business journey with you; and just generally ready yourself (organise your home-office space, for instance) for diving in and taking the self-employed plunge.
Bookkeeping may be getting easier but do you really want to do it?
EVEN WITH THE LATEST accounting programs, like Xero and MYOB Account Right Live making it easier for small business owners to manage their bookkeeping themselves, a bookkeeper is still an invaluable asset to any business. (It’s also the truth that, as much as companies like Xero tell you they make it a cinch to do your own bookkeeping, online account-keeping software programs are still complex and time-consuming to learn to use properly.)
Here we certainly addressed the reasons bookkeeping is a good professional pursuit, but now it’s time to look at the benefits hiring a bookkeeper has to a business owner.
A bookkeeper makes a good, legal sense
The most obvious benefit, of course, is that by having someone to take care of your bookkeeping it frees you up to concentrate on the aspect of your business that you’re best at. But aside from being a legal requirement for every business to keep accurate records, it also helps you to monitor how well your business is performing.
A bookkeeper will work on your bookkeeping every week or even a few times a week, depending on your business needs, enabling you to monitor your daily income and expenditure, and if your accounting software has bank feed enabled, you can monitor it in real-time, too. This is crucial for businesses with many expenses or running costs – businesses that purchase stock or employ staff, for instance – to be able to manage their cash flow.
Paying a bookkeeper can save you money
But having your bookkeeping kept up-to-date also has other benefits, particularly in relation to regulations such as when you need to register for GST, and so forth. Here are five more benefits to your business if you hire bookkeeper to look after your books:
Keeps your tax bill down: Businesses that don’t have someone taking care of their bookkeeping end up spend more with their tax accountant, so it’s really false economy if you think you’re saving money by going without a bookkeeper. It also potentially costs you money in other aspects of your business too, as you’ll find out.
Can manage invoicing: Sure, it’s super easy to invoice your customers and clients now that most good cloud-accounting programs have apps for smartphones and tablets, but there are still plenty of businesses that don’t use the accounting apps on their phones or tablets because of the complex nature of their business. A bookkeeper can take care of this.
To take care of your payroll: When you hire employees or sub-contractors, you’re entering a whole new realm of business. There are superannuation contributions, payroll tax, and a heap of other regulations that bookkeepers have to stay up on, but you don’t.
You’ll avoid ‘late’ penalties: The ATO takes late lodgments pretty seriously, and the penalty for the late lodgment of a BAS or tax return can be up to $850 for each late lodgment. If you’re consistently late lodging your BAS or tax returns, then a bookkeeper basically pays for itself, because unlike fines or penalties, which are not tax deductible, the services of a bookkeeper are.
Chasing unpaid invoices: The reality of running a business, unfortunately, is that a lot of people you’ll do work for won’t pay you on time. Chasing unpaid invoices is a delicate and time-consuming process, particularly when it starts to affect your cash flow and prevents you from taking on more work – buying stock or supplies, for example. It’s always a good idea to separate the face of business from debt collection. It helps keep the client relationship warm and fuzzy, while cash continues to come in the door.
Now that cloud-accounting programs have made it more possible for bookkeepers to work from home and contract their services to many different clients, making it easier and more affordable for small businesses to retain a bookkeeper.
— EzyLearn is Behind a New Bookkeeping Initiative —
I recently wrote a blog post about whether bookkeepers could also provide marketing services to their clients, which I also touched on in another recent post about starting a bookkeeping business and the need to be diverse in the services you offer as an independent contractor. While brainstorming with Ray from the Startup Academy about the services bookkeeper charge and the rates they can earn we discovered that there is a huge variety of services that a bookkeeper can offer and as a result their rates differ.
With cloud-accounting software like Xero and MYOB using automatic bank feeds (also SAASU in their new announcement with Westpac), a lot of the data entry work involved in bookkeeping is reduced because bank statement entries can be automatically matched to transactions in the accounting software. What was once a time-consuming and sometimes complicated process has now become much simpler, and many business owners can manage the data entry themselves. What a business owner can’t do, however, is file their quarterly business activity statements (BAS) because a registered BAS agent must complete those.
Some local bookkeepers may have very low rates
It’s not uncommon for a local bookkeeper these days to charge between $16 and $20 an hour if they only provide data entry services and can complete the work from their home office. Registered BAS agents can charge a lot more than that because they have to go through rigorous training – which includes a certain number of hours supervised by an accountant – before they can be accredited to provide BAS services.
But what about bookkeepers who have a background more diverse than just accounting or finance? There are many bookkeepers who have held vastly different professions in vastly different industries before they started their own bookkeeping business.
Most new bookkeepers have diverse working histories
Since we started offering our MYOB training courses, we’ve found that many of our students initially wanted to know how to use MYOB so they could look after the accounts for their family business and then later decided to work full-time as a contract bookkeeper for a number of clients.
Most of these new bookkeepers previously had careers in sales or marketing prior to starting a bookkeeping business. By combining these skill sets, these simple bookkeeping businesses could offer turnkey business solutions to other small businesses, such as complete operations management services.
Turning modest hourly rates into sustainable wages
In doing so, what would have been a modest hourly rate as a bookkeeper, can be transformed into a sustainable wage that will support a whole family. For people of a career change, creating a full service business is the best way to make you more valuable to clients.
Possessing the skills you need to understand what’s involved in managing a small business is not only useful to your clients, it’s also useful to you; you’re also running a small business, after all.
Leverage your previous work experience in your new venture
Don’t estimate the value of your previous work experience. A background in marketing, for instance, means you understand consumer behaviours, your know how to package products or services so they’ll sell, and you have a strategic mind. These are invaluable skills to bring to any business, so leverage them.
Package your skills, whatever they may be, and develop a truly unique business offering that will help other businesses become more profitable, as well as your own. A full-service Small Business Operations and Management business, for instance, could easily charge their clients upwards of $65 an hour for one of their consultants (you) to manage the bookkeeping and other business operations for a client.
The demand is high for bookkeepers
It doesn’t matter if you don’t know how to use MYOB or Xero. Just take one of our MYOB or Xero courses, which teach you the fundamentals involved in managing a business’s books and then use your bookkeeping services as a way to get your foot in the door with clients.
As I mentioned in my post on starting a bookkeeping business every business has to file a tax return so it’s vital that they keep their bookkeeping up-to-date. Most businesses won’t think they need someone to manage the operations of their business, but they will concede they need a bookkeeper. It’s bookkeeping that will deliver the leads you need because it’s such a highly sought-after service.
Even though a local bookkeeper may only charge modest rates for their data entry services, a more far more experienced, diversified bookkeeping business – or full service operations management business – would earn significantly more for their services.