From a bookkeeping perspective, is there a difference between cost and price?

To understand the diffrence, we’ll talk about what happens when potential clients contact our bookkeeping service and ask us: “what is your hourly rate for bookkeeping?”

By ascertaining the price (the hourly rate) they naturally asume that will tell them the cost of outsourcing their bookkeeping.

They then try to make a comparison by phoning up other bookkeeping services in the belief that they can hunt around and find a bookkeeper charging a better rate and therefore make the assumption that by paying a lower rate for bookkeeping services they will save money.

On the surface, this may be a logical thought process. Mathematically, it‘s a simple equation: The job takes “X” hours @ “defined rate” = Total Cost of bookkeeping services.

Therefore by finding the lowest “defined rate” = You’ll lower the total cost of book-keeping.

However, there are a number of variables in this equation:

• How do you ascertain whether both bookkeepers will do the same amount in the allocated “x” hours?
• How do you know that the quality of work will be the same?

There may be a number of reasons why a bookkeeper is charging a lesser rate:
1) The bookkeeper needs the work
2) The book-keeper lacks experience / confidence
3) The bookkeeper does not know the true value of their service
4) The bookkeeper has lower overheads

The bookkeeping rate refers to the amount of money that consumers have to give up to acquire that bookkeeping service.

Whereas the Cost refers to the amount paid to produce that service.

The cost represents the sum of the value of the overheads – offices, labour, travel, experiences and expertise.

So when the client asks the hourly rate, do they really want to know how much the bookkeeping will cost? And if they focus on the COST, are they looking at bookkeeping fees being an expense or an investment into their business?

A bookkeeping expense could be the result of trying to save money on bookkeeping fees by engaging the cheapest bookkeeper who lacks experience and makes many mistakes

By investing in a bookkeeping service that has expertise, experience, and higher fees may produce better results for your business and ultimately save you time and money overall.

Next time you are “shopping around, consider the situation from a bookkeeping perspective, and remember there a difference between cost and price.

Have you ever considered the options of outsourcing or DIY (Do It Yourself) Bookkeeping?

One of our bookkeeping clients that runs a gym WAS stuck in the same rut that so many small business owners get caught in. Too much time working in the business and no time to work on the business.

Whether you’re a personal trainer, run a gym, or you’re a mechanic with your own workshop in an industrial area, you’ll always need to spend some time bookkkeeping.

Turning your sole trader job (business) into a real business that runs whether you are there or not, means that you have to start freeing up your time and outsourcing.

A good place to start outsourcing is with your bookkeeping. For so many small business owners bookkeeping is a real drudge, it consumes your time, you feel frustrated, and in most cases you’re probably not even doing it correctly.

Regardless of keeping accurate financial records being a legal requirement, it’s also a vital factor in ensuring the success of your business.

Our Gym owner believes that for his business to succeed, he needs to fill his day with personal training clients, often back-to-back. This raises the questions of when does he have time to make his next sale, or do any marketing, or increase his gym memberships?

The crazy thing is that the personal training sessions that he takes are already paid for, and so while he’s working hard coaching his clients, he is doing nothing to increase his business or keep his cashflow turning over.

Until we suggested that he outsourced his bookkeeping, he had no idea why OR where he was losing money. When ever he had a big bill, he went and borrowed more money to pay that account.

Talk about being stuck on a treadmill, he was on the small-business-owner-mentality treadmill of running hard to stand still.

By outsourcing his bookkeeping:

• He was able to get a clearer picture of how his business was performing.
• He didn’t have to worry about paying his bills on time, or paying late fees
• He drastically reduced the amount of bank fees he was paying by being overdrawn and having bounced payment penalties
• He had an extra three or four hours a week to work on his business using skills that he ALREADY has rather than getting stressed and frustrated over doing the bookkeeping incorrectly
• He started to see the benefits of outsourcing, and has started looking at other areas of his business that he can outsource

Look at what work you do each day and each week, and ask yourself what would happen if you didn’t perform some of those tasks.

Then ask yourself if somebody else could do some of the things that your time is being absorbed in doing.

Our gym owner was wasting time going to the shops to buy stationery, milk, check the mail box, do the banking etc.

He was wasting time cleaning the bathroom, dusting and vacuuming the premises.

“But I’m saving money,” he explained.

Let’s just think about that. He’s charging his time out at over $50 per hour, and doing jobs that someone else could be doing at $15-$25 per hour.

You don’t need to be a bookkeeper to work out that not only is he wasting valuable time that could be used to build his business, it’s actually costing him money ( at least $30/hr) by NOT outsourcing.

This is just one example of how outsourcing jobs can help you cut down a huge amount on your expenses. By outsourcing tasks that other people can perform on your behalf, you will be able to attend to more important tasks in your business, which means that you will maximize efficiency and profit of your business.

The first step you can take to save money and run your business more efficiently, is to stop DIY bookkeeping and start outsourcing your bookkeeping jobs for your small business.

Contact BookkeepingTeam Pty Ltd for details

Next time you look at your bookkeeping and accounting fees, ask yourself this question:” Do you pay your accountant to do your filing?”

We’ve found bookkeeping clients that take a shoebox full of receipts and iinvoices to their accountant to complete their tax return. You can dramatically reduce your accountant’s bills by taking care of your own day-to-day finances.

Anything that you can do that will save them time, such as keeping your books in good shape, will save you money.

The simplest way to cut your accountancy bill is to have an efficient and easy system for your invoices receipts, bank and credit card statements.

Ever wondered why your accountants’ eyes light up when you present them with a shoebox full of dockets at the end of the financial year?

Ever thought that if businesses are outsourcing their bookwork, then why wouldn’t accountants?

Chances are your accountant is paying a bookkeeper to do most of your paperwork anyway, and taking a nice margin for the priviledge

The accountants will charge their time to you and pay bookkeepers rates to get the work done. So the accountant has just made a very nice profit from a business owner who desperately needs to tighten up business operating costs.

Do what your accountants are doing, and outsource your bookkeeping.

When it comes to GST and Business Activity Statement; Pay As You Go Tax, accounts receivable and payable, smart businesses turn to Gold Coast mobile bookeepers for their bookkeeping!

New clients soon discover we can save them money in accounting and Book keeping fees, since we provide a methodical, efficient service.

You may find cheaper rates elsewhere, you may find bookkeepers that charge higher rates. Ask yourself: “Am I getting value for money?”

Speak to any of our clients and you will soon learn that they are all more than satisfied with the high level of service that we provide.

So good are we, that we may train our clients to the extent that they no longer need us! Contact us today for help with your filing

Have you ever considered the true cost of a cheap bookkeeper? Everyone likes a bargain, and everyone likes to save on their bookkeeping fees.

The obvious way to achieve this is by hiring a cheap bookkeeper. Right?

Wrong. Unfortunately some business owners continue to fail to heed the warnings, believing that they can save a few dollars on their bookkeeping fees

We were recently contacted by a small business owner after they discovered their current bookkeeper has managed to get their accounts into such a mess that she got stressed out and would not answer emails or telephone calls

Suddenly the “cheap” bookkeeper has just cost the client extra fees.

She had copied the client’s data file and then decided to upgrade it from MYOB 16 to MYOB 19.6 without first consulting the client. The consequence of this decision was that the client is now faced with an unnecessary expense of having to purchase the MYOB v19.6 upgrade.

Suddenly the “cheap” bookkeeper has just cost the client extra fees. If that client had come to us originally we would have happily continued to work on their file using our MYOB v 16 software, even though we have other clients using MYOB v19.6 software.

Not all cheap bookkeepers are lousy bookkeepers – there are some who do not charge accordingly for their services. However, you need to consider the true value of your business and ponder about the economics of saving a few dollars on bookkeeping fees.

If you have a cheap bookkeeper who is very good, then you need to considering increasing their hourly rates, and see what a difference it will make to your business.

Many business owners are unwittingly affected by mental accounting.

What is Mental Accounting?
Quite simply we’ll use an example of buying a concert ticket for $120. We show up to the event only to find we’ve lost the ticket in transit. Do we buy another one (if they’re available?) Probably not.

Let’s then say that we show up to the ticket office with $120 cash in our pocket. When we get there we discover that we’ve lost the $120 cash, but we happen to have some more cash in the wallet to still buy the ticket

In this instance most people would go ahead and buy the ticket, even though we’ve lost $120. But, wait a minute … in the first scenario we didn’t want to spend another $120, but in the second we did.

So what’s the difference?

We mentally think of the first situation of the concert ticket costing us $240, whilst in the second situation the tickets still the same $120, we just lost the other $120 somewhere else
From a bookkeeping perspective either way the situation leaves our wealth at $240 less off!!

Situations where we use mental accounting:
A) We go into a shop in Perth where there’s a sale, and we’re told that if we buy three items we’ll get the fourth free. So we think to ourselves that we’re saving money – but we’re actually out of pocket because we really only wanted one of the items, not four

B) We have $1000 savings in one bank account (with an interest rate of say 5%) whilst we have a credit card debt of $1000 at 15%

C ) We spend more using credit cards than with cash

D ) We’re more likely to spend our tax refund on “lifestyle” items than our savings

The whole point is that in all the above scenarios we are still spending money, so how can we be better off

People get wealthy using one simple formula – spend LESS than you earn.

Why Are we tricked In to This Thinking?
Many people value money differently depending on where it came from. People will rush out and squander their inheritance in the same way as they do with lottery winnings because they consider it as “Found” money

Just the same way many people rush out and spend their tax refund instead of saving it. They seem to forget that the tax refund was in most cases hard-earned income that was overpaid to the tax office, and therefore “forced savings”

We want to buy a car that was $20,500, but when we get to the Perth dealership we discover its an extra $500, so we “wear the increase” and buy it anyway.

If you were looking to buy a $500 fridge and found that it was now $1000, would you still buy it? Probably not – but in both cases we’re still making a decision based on the same $500 – that’s how Mental Accounting tricks us!

How Can You OverCome Your Mental Accounting
Treat ALL income as earned income – that you’ve had to work hard for it

Whenever you go to make a credit card purchase ask yourself “Do I really need this? Would I buy it if I had the cash?”

Money is still money. So an extra $5000 on the cost of a $400,000 house isn’t less than the extra $5000 more on a Lounge Suite

Bookkeeping IS THE KEY to success.
Little things like buying lunch each day for $15 rather than making it at home for $3 adds up over a week to an extra $60, or $240 per month or $7200 per year!!

Think how much that money could save off your home loan!!!

Had an enquiry from a business owner wanting to know how to do BAS from MYOB.

Completing a BAS form from MYOB is straight forward once you know how. Often the problem we find is that in most cases the data is incorrectly entered into MYOB initially.

So when you go to print the BAS report, the figures that are put on the BAS form are not always a true reflection of the busienss activity, and many business owners end up paying too much, or too little to the ATO

If you’d like to email us your MYOB data file, we’ll have a look through it and see if there are any anomolies – which in mostcases there are. Then we can show you how to do the BAS from MYOB.

There are a number of factors that you may wish to consider when looking to outsource a bookkeeping service.

Like many business operators, your time is very valuable, and finding opportunities to do your bookkeeping always seem to be overtaken by other tasks needed to run your business.

Benefits

The first benefit of having a professional bookkeeper come in and do the bookwork is that we won’t be distracted by other incidents that occur during the day in your business

Secondly, we do bookkeeping everyday, are skilled, well practiced, experienced and more than likely faster than you would be

Thirdly, we can most likely streamline the bookkeeping process for you, take away the stress and pressures of doing the bookwork, and free up your time to focus on what you do best in your business, and more importantly give you back some time that you can be spending with your family

Is Bookkeeping an expense or an investment for your business?

You ask about an hourly rate. We believe the question that you really want answered is “How much will it cost me to outsource my bookkeeping?” – that depends if you regard your bookwork, and having a handle on the financial side of your business, as an expense or an investment.

Our clients regard our bookkeeping service as an investment into their business for reasons mentioned above. You could be looking at anywhere from $150 per week, $300 per month or quarter, depending on the VOLUME of paperwork moving across your desk – an hourly rate really doesn’t answer your question.

We say that because we’ve come in behind bookkeepers at a third of the rate, taken four times as long, made heaps of errors, and ended up costing the client heaps – so cheapest isn’t necessarily the best

The easiest way we could give you a quote is to review your existing MYOB /Quickbooks file, and make an estimate based on your last year’s trading (not turnover, but number of transactions recorded)

We can have a chat, so that we can get a better idea of the amount of work involved in your bookkeeping, and therefore give you more of an idea of a budget for your bookkeeping

There’s many reasons why you should get your bookkeeping upto date before the end of the financial year on 30 June 2010.

Often clients are devastated when they discover how much tax they have to pay because they didn’t plan for the FYE (financial year end). Leaving it until after 30 June is too late.

We are not tax agents or accounts, but our team of mobile bookkeepers can certainly help you get your paperwork upto date so that you can at least have three quarters of the 2009/2010 financial year upto date and ready to visit your accountant before the end of June 2010

Do you need some new bookkeeping clients in Perth’s northern suburbs, Western Australia?

If you are an experienced bookkeeper skilled in using both MYOB and Quickbooks accounting software, then contact Us HERE

We’ve successfully been helping freelance bookkeepers starting their bookkeeping businesses around Stirling and Warwick, and they have reached capacity

We only work with selected bookkeepers in finding them clients, negotiating the contracts and organising the appointments – all you need do is show up and do the bookkeeping work

This is a limited opportunity and is suitable only for experienced bookkeepers who are prepared to go on-site. contact Us HERE