Use a bookkeeping firm or a self-employed bookkeeper?

Effective bookkeeping is essential for any business, regardless of size or industry. It ensures accurate financial records, timely tax compliance, and informed decision-making. For business owners contemplating using a bookkeeper in Droitwich or Kidderminster, this article sets out whether to use a bookkeeping firm or a self-employed bookkeeper.

While self-employed bookkeepers have their merits, employing a bookkeeping firm offers numerous advantages that can significantly enhance your business's financial management. Below we set out various questions that you should ask a self-employed bookkeeper and a bookkeeping firm, such as JRMA, to ensure that all your needs will be met.

What bookkeeping or accounting qualifications do they have?

There is no legal requirement for bookkeepers to have qualifications. However, employing someone with a bookkeeping or accounting qualification will give you peace of mind that your financial affairs are handled professionally and accurately. 

Most bookkeeping firms will have qualified individuals who will process and review all your business's transactions, or there will be a qualified person overseeing the process. It is always best to check out their qualifications in both bookkeeping firms and with self-employed people.

What expertise and specialisms do they have? 

One of the primary advantages of working with a bookkeeping firm is the access to a team of professionals with diverse expertise. Unlike self-employed bookkeepers who work alone, a bookkeeping firm comprises a team of specialists in various financial aspects. These professionals possess comprehensive knowledge in bookkeeping, tax compliance, payroll, VAT, and financial reporting. Their collective expertise ensures accuracy, efficiency, and compliance in managing your financial records.

How reliable and available are they?

All qualified chartered or certified accountants must have in place an 'alternate' accountant who will take over their client work should they be unable to service their clients for an extended period.

A bookkeeping firm also offers a higher level of reliability and availability compared to a self-employed bookkeeper. They provide consistent service and guarantee that your books are maintained promptly and accurately, even during peak business seasons. When you rely on an individual bookkeeper, you face the risk of disruptions due to holidays, sickness, or unexpected events. On the other hand, a bookkeeping firm has a team structure, ensuring that there is always someone available to handle your financial affairs.

How scalable and flexible are they? 

Your bookkeeping needs may become more complex and demanding as your business grows. Your bookkeeper must be able to adapt to the changing needs of your business.

A bookkeeping firm is equipped to handle scalability effortlessly. They have the resources and infrastructure to accommodate your changing requirements without compromising the quality of their service. Whether you need to upgrade your accounts or bookkeeping software, adapt to new tax regulations, or integrate additional services, a bookkeeping firm can easily adjust to your evolving needs, offering the flexibility often lacking when working with a self-employed bookkeeper.

How secure is your data and financial information?

Safeguarding sensitive financial data is of paramount importance in today's digital age. A reputable bookkeeping firm ensures robust data security measures to protect your financial information. They employ state-of-the-art encryption technologies, secure servers, and strict data access protocols. Additionally, bookkeeping firms maintain regular backups and have disaster recovery plans, minimising the risk of data loss or breaches. By engaging a bookkeeping firm, you can have peace of mind knowing that your financial data is in safe hands.

A self-employed bookkeeper may not have the knowledge or systems to store your data correctly, so data security is a crucial question to ask. 

Do they have adequate insurance?

If bookkeeping errors impact your business, it is essential that your bookkeeper has suitable professional indemnity insurance, and they should be able to produce their current certificate to prove this. In doing so, you have peace of mind that if you need to make a claim, you could receive compensation if your complaint is upheld.

Qualified bookkeeping firms and accountants must have professional indemnity and public liability insurance to practice.

Can they offer online access to your bookkeeping software?

While you may want to outsource your bookkeeping to a third party to free up your time to run the business, you must always know what's happening within your business. You should be able to log onto your business's online accounts package, such as Xero, and with some training from your bookkeeper, access key information such as who owes you money and who you owe money to. This way, you can keep up with your debtors and creditors and ensure your cash flow is as strong as possible.

What ongoing training do they do?

Your bookkeeper must keep themselves up to speed with the latest rules and regulations which affect the recording and filing of financial records. While double-entry bookkeeping hasn't changed for hundreds of years, the UK tax system is constantly updated, and HMRC regularly introduces new regulations, deadlines, and processes.

Ask your bookkeeper if they regularly attend courses or take proactive steps to keep up to date so that you can be confident your business and its financial information are being recorded correctly.

Qualified accountants and bookkeepers must undertake a minimum amount of training each year to retain their practising certificates. 

Which provider is most cost-effective?

While some may argue that hiring a self-employed bookkeeper is more cost-effective, a closer examination reveals that a bookkeeping firm can provide better value for your money. With a bookkeeping firm, you have access to a team of professionals who can efficiently handle a wide range of financial tasks. This eliminates the need to hire additional staff or invest in a training programme within your business.

Why use a bookkeeping firm such as JRMA?

Using JRMA for your bookkeeping duties will be a wise investment for your business. 

As qualified and experienced bookkeepers and accountants, JRMA can handle all your bookkeeping needs. We will give you peace of mind that your financial information is being processed accurately and on time, allowing you to keep up with your income, expenditure, and cash flow.

We will also look further than the bookkeeping process and let you know if you will likely exceed the VAT threshold during your financial year. We can also take on your VAT processing and payroll duties. 

There's more information about our bookkeeping service here. Or you can call us on 01905 796512 or email info@jrma.co.uk.