Within the UK there are literally thousands of small businesses, plenty of which are owner managed or employ small numbers of staff to assist with the day to day running of the business.
Benefits of an external bookkeeper
Lets look at the key benefits of utilising an external bookkeeper although the below can apply for any role within a small business where there is little requirement or need to employ a member of staff.
See the bigger picture
External bookkeepers have the benefit of not being involved within the business and therefore can see the bigger picture in terms of how the business is being run. Often internal bookkeepers can get too involved with other aspects of the business which in turn detracts focus from their core duties. As businesses grow they will often take on additional admin roles to assist and support the business reducing the time spent on the financial and bookkeeping responsibilities.
It is also worth considering that a bookkeeper external to the business is likely to exclusively work on bookkeeping and therefore are more likely to be an expert. If they provide the same service to others and are part of a professional body they are also more likely to keep up to date with ongoing changes through courses (known as CPD).
No employee costs
One of the big benefits of using an external bookkeeper is there are no employee costs attached to them. There is no need to pay tax and national insurance as they are not an employee. They will require payment of holiday or sick pay as they have no entitlement to them. They will also not attract and recruitment costs such as advertisement’s in the paper when advertising for a job or the cost of a recruitment company.
Linked to the employee benefit above is flexibility. With external contractors such as bookkeepers you can decide when and for how long you need their services. If for example your business is seasonal and particularly busy in the summer months but quite the rest of the year you can only request the use of services to suit your needs. Perhaps one month you only need a couple of days per week and the next you can manage with one day per week, this is fine if you use an external provider as they are not paid a set amount. Employees on the other hand may end up being paid the same even during quieter periods, unless you can get employees on zero hour contracts, a subject of debate and huge media attention as of late.
There are of course pros and cons to both employees and the use of external contracts and each business and their own situation at the time will need to be considered when approaching the subject.
Taking the above into consideration the point of this post is not to discourage taking on staff, its more to provide an alternative line of thought where in particular staff are not needed for a full time role. Employing staff does have it’s own set of benefits and good staff can be a massive asset to a business especially when a business has their exclusivity.
Feel free to add any comments you may have below.