Beyond Bookkeeping

Are you an Adelaide Business? Do you need a Bookkeeper Who Offers you More than Just the Numbers?

We’re Only a Phone Call Away: 0435 990 480  (all hours)

A good bookkeeper will provide you with the “nuts and bolts” of your business information system. They can process your debtors, creditors, payroll, complete your bank reconciliations, process some journal entries and even produce a trial balance. This is essential information.

But once all this is assembled and reports produced, what are you going to do with it? Is the only value in good bookkeeping to satisfy the tax man? Or is there more?

Certainly, compliance with tax law is important, which makes accurate bookkeeping critical. No one likes the hassle of an income tax or GST audit because the ATO has noticed that certain numbers and trends don’t reconcile. But what about the value of good bookkeeping to the business owner?

There are some interesting things you can do with “the numbers” to help you evaluate the health of your business, as well as make strategic decisions. This is where we go “beyond bookkeeping” to the realm of the accountant.

I remember a number of years ago, I was keeping the books for a backpacker hostel. They hadn’t been at it long and needed to know whether their “bed per night” rates were making them a profit or not. So we did a little exercise. We assembled all their “fixed costs” (costs which don’t change, such as loan interest payments etc) and “variable costs” (costs which are directly connected to putting a body in a bed and feeding them) and applied some “Cost-Volume-Profit” analysis to determine their “breakeven point” – the price at which they only cover their costs. Anything above this, puts them into a projected profit outcome.

This was a very enjoyable experience for me, because it was of real value to the owners. They realized they had to put their prices up slightly if they wanted to justify staying in business and receive a return on their investment. After all, why go to all the hassle of running a business if you can make better money leaving it in the bank or other more passive investmens such as real estate or the sharemarket? It has to be worth it.

Are you an Adelaide Business? Do you need a Bookkeeper Who Offers you More than Just the Numbers?

We’re Only a Phone Call Away: 0435 990 480  (all hours)