Category: Entrepreneurs

Do you want to be a bookkeeper?

Nicola Wong Leave a comment

I received a query last week from someone in our network looking for advice on how to start a bookkeeping business. The answer isn’t short but it did get me thinking about how I ended up on this journey and I would like to share it {short version – I am known to ramble}.  I am a working mum. One of the greatest pleasures in my life is having the flexibility to be able to take my kids to school, drive them to their multitude of activities and be around in the school holidays.  That’s not to say I always do it, my husband is a pretty good taxi service!

The bookkeeping industry is flourishing at the moment. Many accountants are building alliances with trusted bookkeepers so they can focus on more structure and advisory tasks for their clients.  This is an excellent field for parents who would like to stay at home with their kids. Bookkeeping is my favourite business task because I can work around my kids and adapt as they grow.  It has been my sanity by giving me something to focus on during those mushy toddler years.  Now we are well and truly out of the toddler age, I’m thankful for the little steps I took to build the business even if I couldn’t see it at the time!  And with cloud accounting now in the picture, it’s even better!

How long it takes you is all up to YOU!  I come from a financial background so the transition was logical, however as you know, parenthood has its moments and the thoughts of building a business get jumbled up with the daily grind of bringing up a young family.  It doesn’t matter how long it takes you, one step at a time is all you need and it will be worth it in the end!  If I add:

  • 1 year to think about bookkeeping as a business;
  • 1 year to complete my Cert IV in Financial Services Bookkeeping;
  • 3 years of building a client base through word of mouth and get my BAS registration;
  • 6 months to think about getting my Xero Certification;
  • 6 months thinking I really should get a website; and
  • 6 months to actually launch the site into the public domain

Wow that’s 6 ½ years! Could I have done it faster?  Of course.  But it hasn’t been hard or cumbersome.  Each step has been as my children take extra steps.  My business is like an extra child, growing as my children grow.  Growing as I grow.  There is no fast or slow, it’s all about you and when you’re ready.

If you would like to know how to become a bookkeeper here is a snapshot of the steps to take:

Step 1: Do you really want to be a bookkeeper?

First determine whether you actually like bookkeeping! Don’t do it for the sake of it.  If you really hate numbers, it just might not be a good fit!  Speak to some fellow bookkeepers, read about what is required, look at job advertisements and see if you picture yourself in that field of work.  We offer online assessments that can let you know what industries you’re suited for.  Contact me to find out more.

Step 2: Get qualified

Dabble in a MYOB or Xero short bookkeeping course to give you a feel for what it will be like. You will learn something even if you don’t continue so it won’t be a waste of time.  If it’s still a dream or you already have basic bookkeeping experience; get qualified with the either of the following courses.  These can be done online which is super helpful for parents with young families.

  • Certificate IV in Bookkeeping; or
  • Certificate IV in Financial Services (Accounting).

There is a very fine line between a bookkeeper and BAS Agent. You are required by law to be a BAS Agent when offering BAS services.  These two accredited courses contain the minimum qualification components for registered BAS Agents (as per the Tax Practitioners Board).  You can provide bookkeeping without being a BAS Agent but it is limiting.  Therefore my advice is to have it as a goal to become a BAS Agent when you start your journey.

Step 3: What accounting system to use?

The more systems you know the better, however become an expert in one to start with. I have experience in Xero, MYOB and Quickbooks Online but I learnt one at a time purely based on what my client’s needs were.  My focus is now on cloud bookkeeping to allow me to reduce travel time, work flexible hours and attract clients not based on location, they can be on the other side of the city and it doesn’t matter!

Step 4: Work Experience & BAS Agent

Anyone who is thinking about starting their own bookkeeping business in Australia needs to be aware of the rules regarding BAS Agents, who are eligible to provide Business Activity Statement services for a fee. Any bookkeeper wanting to provide BAS services must be registered as a BAS Agent. To become a registered BAS Agent, a bookkeeper must have 1400 hours of experience and a minimum qualification of a Certificate IV in Bookkeeping or Accounting.

http://www.tpb.gov.au

Step 5: Get certified with your accounting package of choice

Once you are a BAS agent, the accounting software companies like Xero, MYOB and Quickbooks do provide bookkeeping memberships that give you additional training and support. You can become aligned to either of these companies and get certified as a partner or advisor.  This is not absolutely necessary to launch your business but it does add credibility to your portfolio and shows you have the gumption to get through the extra training and tests!

So if you have done all these things. There is absolutely no reason why you cannot launch your own bookkeeping business!

Keep count of who owes you money

Nicola Wong Leave a comment

When I review any business, one of my priorities is how much money people owe you.  I’ve seen Ageing Receivable lists spanning pages!  All small businesses need cash and here are some simple cash flow tools to help you pull that money in.

1. Deposits Upfront

Reserve the right to charge a deposit upfront prior to commencing work.  This may be to cover the value of materials used or simply good business practise.  If you quote, chose for example to ask for a percentage of the quote upfront to secure the job and to ensure you are not left out of pocket.  This is useful for customers you know are late in paying or new clients you don’t know very well.

2. Terms of Trade & Payment Terms

Your terms of trade are how long a customer has to pay you.  Commonly used are 7-days, 14-days or 30 days.  For SME’s I recommend 7-days and 14-days.  Your payment terms should be included on your quotes and your tax invoices.  As soon as the payment term is up, you can follow up on non-payment.

The longer the payment terms, the more likely the customer will put your invoice at the bottom of the “to pay” pile and forget about it.  This means you will have to send a reminder but you will have to wait until those 30 days are up.  By the time you have sent your Statement, it may be 6 weeks before you are paid if not longer.

3. Tailor your Statements in your Accounting Software

You can tailor your Statements and Invoices in your accounting software.  Take the time, 10 minutes spent here will ease the effort of sending Statements to customers at the end of every month.  Even if the terms of trade haven’t expired, it is commonly accepted in business to send Statements to remind customers of their outstanding balance.  Anyone using Xero the Statements are simple to tailor and will only take you 5 minutes.

4. Discounts & Charging Interest

Discounts are not ideal for optimum cash flow.  However they do serve a purposes and you may wish to consider offering a small discount if customers pay by a certain date.  Similarly charging interest to recalcitrant customers is not good for small business relationships (note, do not charge interest unless it is already specified in your trading terms in writing).

5. Client Engagement Letter

Set yourself up right.  Include your expectations and your terms of trade in a Client Engagement Letter or Quote.  Have it signed before you commence work.

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Need help to extinguish fires?

Nicola Wong Leave a comment

This week I met with a small business owner who was literally pulling his hair out.  Having recently taken over a business from his partnership, the thought of cleaning up the books quite frankly scared the living daylights out of him.  It just wasn’t his thing and what makes him a great entrepreneur is he took his hat off and got to work with surrounding himself with the right people so he can do what he does best, sell.

No matter how big or small your business is, whether you are a one man show or 100 plus employees, every business has roles that need filling.  For SME businesses those “roles” can get a wee bit blurry.  Becoming an entrepreneur means not only living out a dream – it means expanding your repertoire to become the talented, diverse and multi-hat wearing person in each and every one of these segments of your business.   Well done you!  But do you find you have very little time to do any of them well?  Do you wish there was more support?  You are definitely not alone!  How many hats are you wearing right now?  Are you wearing them all well?

Will being so hands on help your business grow?  Not as fast as you would like.  Entrepreneurs are under immense pressure to succeed and be everything.   My question is, do you really need to be everything?

Being an entrepreneur does not mean overnight you have become an accountant or computer guru nor have you developed a love for admin and being organised!  An entrepreneur is someone who acknowledges he or she cannot be everyone.  Surround yourself with the right people to help you succeed.  You need a reliable business team.   That’s right – the myth around entrepreneurs being individuals who don’t like teams has just been shattered.  Your business team will be people, networks and alliances you trust and who will look out for you and your business.  Be positive, encouraging and supportive.  For example, your accountant is not just your accountant.  They should be someone you trust and who will look out for you and your business.  They are part of your team.

Your business team is an essential component of your business success.  Your business team is your biggest TOOL!  They are the mechanics that help you run your business efficiently so you can focus on what you do best.  Make more money!

Now might just be a good time to step outside your business and look inside.  What should you be doing today that would benefit your business in the future.

Can the fires you are fighting be extinguished by someone better qualified? 

Think about what is YOUR time worth.  Consider what your business needs YOU to be doing to grow.

Do you have the right business team surrounding you?