[Question] Accounting - How do you view this?

[Miro Bagrov]

Looking for general input from all members:

As far as accounting and financial management practice in your business which approach do you follow:

• Keep no records seperate, eg. use the bank statement balance for reference.
• Hire an individual
• Outsource the function to a consultant
• Do it yourself
• Get a family member or friend who studied it, to do it for free

Also what experiences have you had with different options?

[Mike C]

In my opinion one should never be casual about accounting. When a business is small one is very tempted to "hang loose" and record keeping is casual.

If, however, the business grows and starts making serious money, the lack of accounting starts becoming sloppy, if not downright dangerous. It is always better to have the basics in place right from the beginning.

If you can do it yourself, well and good.
If you are too busy or that kind of thing is not your scene - then get someone else to do it. But always check the books periodically for yourself, because it can get away from you too easily.

And why should you get a family member or friend to do it for free? Do they not deserve as much payment as someone you would hire?

[Miro Bagrov]

Generally, do you all outsource or in-source?


I agree about the family members

[HR Solutions]

We in source and have an accountant do the relevant "accountant thing" that they do at the end of the year for a PTY.

[Mike C]

Insource. There is one person responsible for all the financial transactions, the payroll and the book-keeping in the business. The boss has utmost trust in his character and ethics.

When you outsource, you are having to do most of the work for them anyway (sending of paperwork - explaining what it's for etc). Most of what they do is just organise and keep records.

We have a reputable company of auditors who audit our books annually, correct the few mis-postings, answer any technical questions or give advice when needed.

[Dave A]

I'm in the same situation as Mike - normally minus the misposts

At this point I'm responsible for the internal accounting, but invoicing, bill capturing and stock management is delegated to 3 others in the company.

[Payroll4SA]

I think when your company is still small and just starting, but you do not have the time or skills to do the accounting, it is then better to outsource it to someone who specialises in accounting. You don't need to make use of big and expensive accountants or auditors, there are many smaller bookkeeping services or financial services out there.

It is a good practise to check at the end of every month what the income and expenses was so that you know what to focus on and where to make adjustments for the next month. Don't wait for six months or a year to see what your situation regarding the finances are!

I work together with such a "small" financial service company. They focus on their client's bookkeeping, and when their clients have employees and need payroll services, they outsource the payroll function to me, as I focus on the full payroll function for small businesses.

[KimH]

As someone whose business is offering an outsourced bookkeeping/payroll service, I am of course all for outsourcing I do work in association with both a CA and a Professional Accountant which means I do the grunt work and they take care of the AFS and company taxation - I find this arrangement works really well for my clients, from a peace of mind and fees point of view.
One would expect that it's only small or home based business owners that outsource, surprisingly enough the majority of my clients are medium sized and have more than one business.

That said, always be sure that if you do go this route, that you use the services of a a properly qualified bookkeeper who is a member of one of the five controlling bodies for tax practitioners (well they better be by the 1st July anyways) - and always, always get references from their existing clients and even the accountants they work in association with.

As a side note I was just wondering whether I could claim some CPD hours for the time I spend on The Forum SA