As I mentioned in a previous post, Im trying to get a better idea of what being a bookkeeper actually involves, in order to decide whether I should try to follow in your footsteps.
Ive read quite a number of books on bookkeeping and tax, which has been helpful (although a long way to go on the learning front, obviously!) .Ive also read a large number of posts on this forum.
But the point Im still struggling with is the question of how to get a sense of what its really like to work as a bookkeeper i.e. what its like to do this job day to day.
To put it another way, if I were to do a weeks work experience in your office, what exactly is it that I would observe? What would I learn from this and get out of it?
In an attempt to get the ball rolling, let me use my current limited knowledge and my imagination to try to think about what Id see you doing.Let me list some activities, and alongside them some rough percentages of the amount of your time that I think you spend doing them.On the basis of this you can point out things that Ive left out, and things where my understanding is not quite right.
At the computer sorting out your clients accounts using an accounting programme, printing out reports for clients, filing with HMRC.40%
On the phone with or emailing clients, perhaps often asking them for information that they have not provided!10%
Face to face meetings with clients or potential new clients.10%
Working on marketing mailshots, networking etc.10%
Travelling to meet clients or for marketing purposes.10%
Researching the relevant accounting rules, contributing to forums etc. 10%
General administration of your office, organising your time etc. 10%.
Is that about right? What do you think?
What do you think I would be surprised by if I did work experience with you?
What do you think I would notice most particularly?
As Im sure you appreciate, these career type decisions are important, and so I would really appreciate any input however brief that you might be kind enough to give me.
My day normally starts with Scanning any letters received, and reading and replying to emails. I then review any payments due and check my bank account to ensure they have been paid in. As I collect the majority of fees through Standing Order it's important for me to keep on top of it to make sure no payments are missed and to chase them up quickly. Having said that, I generally know what should be in my business account to the nearest pound.
I have recently started using a new system which lets me send text messages to clients regarding problems with their account, or deadlines. I'm finding I get a far quicker response than with emails.
I was spending a bit of time paying bills when they came in, now I just make payments 2 times a month. This has helped to free up my time and to make sure bills are not overlooked.
I check who has had a quote from my website, and make sure I follow them up, and chase up any outstanding quotes I've provided.
Then I generally spend some time working on client paperwork.
Because I work from home and have 2 young boys I tend not to spend more than a few hours working, with a break to play with them, then another few hours working. I find this pattern suits me. That's really the reason I'm self employed, to work to suit me and my family.
I spend a bit of time each day on here, Aweb, ICB Forum, UKBF and on Facebook and LinkedIn doing some networking, unless I am particularly busy.
I visit each regular client about once a month, normally to drop off and collect paperwork. I enjoy this as it gives me a chance to speak to them about changes they're making or new ideas they have. It lets me keep my finger on the pulse of their businesses and anticipate any increase or decrease in workload.
On a Friday afternoon I plan my next week, taking into account client deadlines for VAT etc.
There are other things I do less often. Once a month I review my budget and my marketing plan to make sure I'm still on track.
I accept this is a very quick rundown, but I hope it is of some use.
Mine is not quite as organised as that as I have certain days that I work for certain clients (from home) and then the other days I tend to work out what is needing doing ie VAt returns etc. I tend to go through all my emails in the morning but also look at them through the day if I am working from home.
I have a couple of clients I visit regulary so make sure I do that to suit a day that I am free.
Go on here a few times a day depending what I am up too. If I am really busy then it will be the evening that I am on here.
Often last thing at night I write a list of important things that need to be dealt with the following day to make I don't forget anything.
Like Kris I have to work round children, although mine are both at school, mind you its orthodontist appointments at the moment I am fitting in for one of my kids!
I have just started networking again with Accountants, so started making those phone calls last week to make sure they all know I am on the look out again.
I'm pretty much the same as above, I always start by checking e-mails and doing any odd bits of work that may have evolved overnight. My job is multi-faceted so the bookkeeping side tends to slot in and around everything else, though I do tend to keep on top of it due to needing to give information based on it a lot of the time. Of course with the kids needing picking up from school and such like, and there never ever appears to be enough hours in the day to get everything done, this means my outlook calender tends to have a lot on it ready for the next day.
@ Kris, Do your clients then put the folders that you have created in date order, into one larger file say for the year?? Or do they prefer to keep it in month order in separate files as you have given it to them??
I have a few that I keep their paperwork each month and file it in a larger file, they don't seem to want it back! I have one guy who is an annual, and his stuff arrived the other day and I offered to give him the previous years back as I have had it for a while from the accountant and he said he was in a hurry and didn't want it! So it is still sitting on my shelf! Some of my clients when it is the year end I offer to take it all to the Accountant so I can then net work with the Accountant and make myself known. This has work well in the past and plus my clients (or some of them) just haven't got the time to go to the accountant and they like the fact that I offer.
Lastly the report that you do them do you do it on a spreadsheet or does it come via some software?
I only do payroll for one person and I am not looking to expand upon this as I don't think its a money maker.
I think if I get any new clients I will adopt your approach Chris and help organise them thats if they need organising. A couple of mine are brilliant and are already very organised.
-- Edited by Amanda on Monday 7th of May 2012 08:40:58 PM
@Kris: Thank you very much indeed for taking the time to run through your day like that very interesting. When you say paying bills are you referring to bills addressed to your own business or to those of your clients? When you say working on client paperwork, this may sound like a really stupid question, but what would be some of your typical tasks? I am aware of things like bank reconciliation and producing monthly reports. Is this the kind of thing that youre referring to? It certainly sounds like you are very much on top of things. Thanks again for such a detailed response.
@ Amanda and Steve: Thank you very much for your replies.
Its interesting that you all manage to succeed in combining your bookkeeping operations with your childcare commitments.
My impression is that there are clearly many different components to the bookkeepers role. Youre not just bookkeeping, youre running a bookkeeping business as well (and thats very appealing from my perspective).
As far as the bookkeeping goes, are there any classic tasks that you do day in day out, or week in week out? Ive read quite a few books on this stuff (with a lot to learn), and watched lots of YouTube instructional videos on QuickBooks etc. But Im still trying to get a handle on what the actual day to day nitty gritty of the bookkeeping side of things primarily consists of.
Thanks again for your responses. Much appreciated.
When I said I now pay bills twice a month, I mean bills that come into my business for goods or services I've bought. Most offer 30 day payment terms, but I still used to pay them when they arrived. I wasted a lot of time, now I collect them and pay them in batches twice a month, it also helps with my cashflow.
I'll take a typical client to explain how I manage the client paperwork. I ask clients to arrange their paperwork in a specific manner and normally provide them with 3 foolscap wallets. This means when I pick it up it's generally in 3 seperate folders, and I leave the client 3 for the next month. One for Sales Invoices/receipts, one for purchase invoices/receipts and one for bank/credit card statements. I normally ensure each of these are in date order and create a new folder for each for that month (I use square cut folders with Acco fasteners) ensuring I can return the clients folders next month.
I normally enter all of the sales invoices/payments first, then the purchase invoices/receipts, marking any payments made. Then I reconcile the bank statement and credit card statements if any exist. Each month the client is provided a simple one page report, depending on the information they require. Mainly these show a single figure for Sales, cost of sales, gross profit, expenses and net profit. It also shows tax and NI liability for the year to date and any VAT liability to date if the business is VAT registered. Form experience this is the key figures that small businesses are looking for. I then process any VAT return due.
I provide credit control services for a few small businesses. These are mainly in the building trade. The business phone a separate telephone line which has voice mail on it. They leave a message of any job they have carried out and the details. This means that they can phone me as soon as they finish a job. I then create an invoice for the work and, as long as the message is received before 3 o'clock I can send the invoice the same day. I can then chase up these invoices if they are not paid. The business just complete a simple tick form each month telling me what payments they've received.
I don't do any payroll, I pass on any payroll requirements to another bookkeeper.
I am not a naturally organised person so I have had to try hard to put processes in place to make sure I run my business in an organised manner and tackle jobs in a systematic way.
......................... As far as the bookkeeping goes, are there any classic tasks that you do day in day out, or week in week out? Ive read quite a few books on this stuff (with a lot to learn), and watched lots of YouTube instructional videos on QuickBooks etc. But Im still trying to get a handle on what the actual day to day nitty gritty of the bookkeeping side of things primarily consists of. .......................
Hi Patrick,
THE classic task to me can only mean one thing. It's when you have a client that never forgets outgoing expenses (including some not, shall we say, wholly, necessarily and exclusively incurred for running the business), but somehow doesn't always remember to book down sales.
In my business this doesn't always come to light until the bank and cash are reconciled. At the end of a quarter or year, I may find that the amount of bankings, expenses and purchases recorded exceeds money coming in. The nitty-gritty is in tackling the client as to where the excess came from: insurance claim, the wife, asset sale, the horses, or sometimes it even transpires that the further income was from sales.
Hope we're we tempting you into this profession and best wishes if you do.
Generally, I keep each of the clients files on a monthly basis. The folders I use are square-cut buff folders with acco clips. I store each clients files in zipped courier wallets, then at the end of the year I buy each client a box and return their paperwork to them. I have a few who have their own filing system in their office using lever arch files and in this case they transfer the files as they see fit. I need to give it back each year as my office isn't big enough to store it forever.
The report is just something I made on an excel spreadsheet, I can drop you a copy if you want a look.
Terri from A1 Bookkeeping does my payroll and for what I think is a good price, and I don't really need to do anything, or keep up to date with payroll legislation.
It is human nature, particular amongst entrepreneurs to maximise their bottom line and oversights can be as small as including a newspaper bought at a filling station in Motor Fuel, but the tendency is the same. A professional might forget a fiver for signing an friends passport ID.
Well due to what are, IMO high historical tax rates and deadlines; instead of using our training to help identify savings and promote profits, we're in the business of selling snow to eskimos. That is, for the smallest of businesses, there are weekly (next year) quarterly and annual filing for VAT, Tax and accounts, and he pays us to do this, mainly because he has to.
I'll let someone else take up the baton on money laundering but it will be very clear to even an inexperienced bookkeeper that further income was received or excess expenditure has been included. If we are to add our certificate and signature on a balance sheet then our professional ethics and reputation are on the line. I would always seek an explanation for an overdrawn cash account, for instance, and a forensic eye might hint to me the cause. A vehicle may have been sold immediately prior to the cash becoming overdrawn or there are no corresponding sales invoices where it is is apparent many expenses have been incurred at the other end of the country.
I've rarely been unable to convince a client to add income or reduce expenses sufficient to cover estimation of the shortfall. Obviously this situation can become quite fraught and a parting of the ways can result.
Who said accountancy is boring. Hope that gives a little insight into our work.
best regards
EDIT underlined and a little punctuation
-- Edited by Don Tax on Tuesday 8th of May 2012 08:59:12 PM
......................... As far as the bookkeeping goes, are there any classic tasks that you do day in day out, or week in week out? Ive read quite a few books on this stuff (with a lot to learn), and watched lots of YouTube instructional videos on QuickBooks etc. But Im still trying to get a handle on what the actual day to day nitty gritty of the bookkeeping side of things primarily consists of. .......................
Hi Patrick,
THE classic task to me can only mean one thing. It's when you have a client that never forgets outgoing expenses (including some not, shall we say, wholly, necessarily and exclusively incurred for running the business), but somehow doesn't always remember to book down sales.
In my business this doesn't always come to light until the bank and cash are reconciled. At the end of a quarter or year, I may find that the amount of bankings, expenses and purchases recorded exceeds money coming in. The nitty-gritty is in tackling the client as to where the excess came from: insurance claim, the wife, asset sale, the horses, or sometimes it even transpires that the further income was from sales.
Hope we're we tempting you into this profession and best wishes if you do.
Regards,
Tim
hey Tim,
Thanks very much for your reply. That's an interesting issue, actually. As far as I understand it, what you're getting at is clients maybe not declaring income and so decreasing their taxable profits, while increasing their expenses for the same reason! How much of an issue is this? And what is the bookkeeper's duty in this situation? i.e. to what extent does the bookkeeper have to encourage the client to behave correctly?
