Business mentor: Paperwork no place to get bogged down

Q: I enjoy everything about running my business, except doing the books. I get bogged down in the paperwork, never really getting on top of it, and am afraid that I will miss an IRD deadline. I want this year to be different. It would be great if I could get someone else to look after this for me. What are my options? Do I have to employ an accounts person?

* Tracey McKeown, Director of Urban Accounting, replies:

A: There are a couple of options available to small-business owners who want to free themselves from their book-keeping and day-to-day accounting duties.

Employing your own accounts person is one option.

Remember that this person will require office space, a computer, accounting software and will take time and money to recruit and train, even if he or she is experienced. The employee option will require ongoing management, and will have periods of absence for holiday and sickness.

Employment works well if you need someone to do other administrative tasks in addition to the accounting, such as taking sales orders and managing your appointments.

This gives you the ability to create a role that covers all of your needs.

Another option is to contract your book-keeping to someone else. The main benefit of this is that you are not only free from doing the books, but also from the staff issues associated with employing someone.

When choosing an outsourcing partner or contractor, you will need to have an idea of what your priorities are.

There are a number of things to take into consideration and different providers offer slightly different services.

* Do you need to have someone work at your premises? If you do, they will need access to a computer and accounting software, whereas an offsite book-keeper will usually provide the software themselves and work from their own office.

* If they are an offsite book-keeper, how do you keep track of what is going on with your accounts? Check to see how frequently reports and information are provided and how regularly you meet to discuss your accounts.

Find out how they ensure that you retain control. Confirm that they are contactable during normal business hours.

* Is the provider an individual or a team? Dealing with an individual allows you to develop a one-to-one relationship, but there may be gaps in the service during periods of holiday or illness. A team can provide continuous service and possibly a wider range of expertise.

* What range of services do they offer? Some book-keepers will do everything, including preparing your tax returns. Others may recommend that you use the services of a tax specialist for this work.

* How flexible is the service? Ask if the service can be customised to your needs. It is important that you get the information you need to manage your business in a format that is useful to you.

* How do they charge? Pricing is usually done either on an hourly rate or fixed fee for service, charged weekly or monthly. An hourly rate will allow for the seasonality of your business, whereas a fixed fee means no nasty surprises.

Lastly, having freed up your time to expand your business, ensure that your book-keeping partner has the capacity to grow with you.

* For more information contact Tracey McKeown at tracey@urbanaccounting.co.nz or (09) 376-2701.

* Email your small business questions to georgina.bond@nzherald.co.nz.

Answers are courtesy of small business sector specialist Sarah Trotman.

Email: sarah.trotman@stassociates.co.nz