Celebrate Global Bookkeeping Week!
Celebrating Global Bookkeeping Week is a timely reminder to reflect on the significant impact “number crunchers” have on New Zealand small businesses.
Bookkeeping is one of the world’s oldest professions, dating back to the days when the financials were kept in order with barter and manual systems. I’m talking about as far back as the 13th century here, when Lucia Pacioli published his book ‘The Summa’, which essentially formalised double-entry accounting. Little changed until the mid 1980s, when computers and technology changed the world. Fast forward to present day bookkeeping and accounting, and software is predominantly cloud based and accessible from anywhere. Software has ultimately given the bookkeeper and their clients the tools they need understand the numbers behind their business.
Small businesses dominate our country’s economy. Almost half a million of them are currently in operation, according to the Ministry of Business Innovation & Employment. They range from sole traders to small enterprises (one to twenty employees), and together it’s estimated they contribute to more than a quarter of our country’s GDP.
How can a professional bookkeeper help a small business?
Bookkeepers are integral to small business. They reconcile the bank accounts, ensure creditor bills are correct, chase debtors, and prepare cashflow forecasts, as well as undertake compliance such as payroll, PAYE and GST returns. It is not unusual for the bookkeeper to be the centre-point of a small business.
Bookkeepers are often the first to see the cashflow trend of the small business and are well positioned to advise on using software to streamline the business. Additionally, they’re the first line of defence against small business failure: a bit like the canary in the coalmine.
A rule of thumb has been that 25 percent of small businesses fail in their first five years. Often this failure is due to inexperience and/or mismanagement. Both of these reasons can be brought back to not knowing your numbers and planning.
With fraud on the rise in the age of the internet, bookkeepers can help reduce the risk by implementing good internal controls and robust accounting software with audit trails.
Security attacks, virus, malware and malicious links are becoming more commonplace in today’s world, the front line accounts person will be one of the first personnel to identify a potentially malicious email link or scam.
Succession and contingency planning, for many small business owners the ultimate dream is to work hard, build up the business to sell and retire on the proceeds. Sadly for many small business this is not the case. Bookkeepers are agile and often at the forefront of technology to research and implement relevant software and systems in place to be able to ‘box up’ the business for sale.
Standing behind the numbers
Behind those numbers, and every business, is someone in a bookkeeping role or function. The significance of their services should never be underestimated. Without bookkeepers helping businesses with good record keeping and compliance, our Government would not be able to administer our taxes and keep building better schools and hospitals and support our growing and ageing population.
Global Bookkeeping Week is your opportunity to reflect and celebrate helping small businesses to succeed, as well as consider any further professional development you might need to set yourself up for an exciting new digital future.
Congratulations on being a bookkeeper, and thank you for contributing to New Zealand’s small business economy!
Source: Xero Blog