From head-wrecking agony to an outsourced finance department. There must be nifty ways to leave your bookkeeper. Meet Stan, Roy, Gus, and Lee Murphy. They have an engineering company called SRGL Industries Ltd [the company]. Dave is their bookkeeping & admin guy. And what’s more awkward is that he’s Lee’s brother-in-law. Let’s look at
- The Problem
- Solutions
- Outsourced Finance Department
- Why Outsource
- Summary
The Problem
It’s Monday evening, and Lee arrives home from work. He’s thick. What’s up Lee asks his loving wife Mary. Oh, there was an incident in the office today. We owe Revenue €6,000 interest because we didn’t pay our corporation tax on time. Is there anything you can do about it she replies. No, we missed last November’s payment deadline and only paid it a few weeks ago. Dave got the letter from the accountant telling us to pay it back then, but he was away on holiday at the time. And he never opened the letter when he got back.
I checked with the accountant, and he says that we can ask Revenue to look at it, but it’s the law. And they won’t change it. He says it’s a simple win for them. It’s awkward for Lee as he likes Dave outside of work. They run together and have some of the same friends. They gave him the job in the first place to help him out after he was let go from the local multinational. And he was good at maths in school! Mary dug further to see if there were any other issues.
The issues
Mary is shocked to find out that
- He overpaid one supplier by €4,500. Paid the same invoice twice
- The 4 brothers are on the wrong PRSI class, so they were paying PRSI when they shouldn’t have been. At least they can get that back.
- There have been some issues with the VAT that resulted in a Revenue letter.
- The accountants want to charge us more. They are constantly getting questions from Dave that’s eating up their time.
- Invoices aren’t going out on time, and we are owed a small fortune.
He doesn’t say anything about the tension in the office or the Christmas party incident. Mary says
“Oh Lee, it grieves me so to see you in such pain
I wish there was something I could do to make you smile again.
I said, “I appreciate that, and would you please explain
About the nifty ways?”
Solutions
Stan, Roy, Gus, and Lee think it’s time to act. Things have to change. Daft Dave has to go but what will they do instead? And how can they do that without making it personal? Their options are to either
- Hire a more experienced person or
- Outsource the bookkeeping to the accountant if they’ll do it.
New Hire
The cost of employing Dave is €15,000, not to mention the extra costs. To get a more experienced person, they reckon it would be €20,000 for a part-time role. Between them, they don’t know anyone, and in the current climate, it’s very hard to get anyone. Not to mention getting someone good. Stan and Roy are in the workshop, so it doesn’t bother them as much. Gus travels a lot, so Lee is in the office and will have to work with the new hire. But he’s not a numbers man and understands now how important it is to get things right.
Then there’s the hiring process, as he wouldn’t know a good bookkeeper from a bad one. Perhaps a recruitment agency would be a better option. More expensive, but they could unearth a gem. There’s also holiday pay, sick pay, and technology costs too.
He has no problem paying the money once they get the right person, but good bookkeepers are like hen’s teeth. He goes onto Dr Google and finds a blog called Outsourced Accounting Partner. Much to his surprise, those lads are only out the road in Tramore!
Dithering
Weeks have moved on. The lads are dithering on a decision. Lee’s mood hasn’t changed. Mary is worried about Lee, so she has enough. Taking the bull by the horns, she arranges a meeting with the 4 Murphy brothers. She starts
“It’s really not my habit to intrude
Furthermore, I hope my meaning won’t be lost or misconstrued
But I’ll repeat myself at the risk of being crude
There must be nifty ways to leave your bookkeeper.”
Make a new plan, Stan
You don’t need to be coy, Roy
Just get yourself free
Hop on the bus, Gus
You don’t need to discuss much
Just drop off the key, Lee
And get yourself free.”
Time for action. Lee calls Deirdre in Comerford Foley to set up a meeting with Ger.
Outsource
Lee tells his tale of woe. Ger listens and finds out what the company needs. The basics, as he calls them.
- VAT returns are right and filed on time
- Weekly payroll submitted on time with employees getting payslips. Calculate holiday pay, public holidays and answer queries when needed
- Know debtors and creditors’ numbers every month
- The bank reconciled, and you know the bank balance
- All tax payments are on time. Will transfer VAT liabilities to the VAT account
They also want help with raising invoices and credit control. Both agree to a 3-month trial to see how it works out. A proposal goes out for a monthly fee of €1,500, and a review meeting is booked in for 3 months. The proposal lists all the services we will provide. Ger sends Lee details of a super HR business to help with the exit of Dave. And advises him about redundancy, given that Dave has been an employee for more than 2 years.
Outsourced Finance Department
Lee and his brothers have acquired an outsourced finance department. A step into the unknown, perhaps. But a step that will have a massive beneficial impact on their business in the coming years. There’s an element of building trust. Plus, they want us to do things their way. The plan to invest in a quality bookkeeping function means going onto Xero and Dext. And transferring your payroll to Collsoft. Everything is very new. New technologies and new people.
What do they get?
They get an expert team of people with cutting-edge technology. The key element is the quality of the people looking after them.
- Aedin as the dedicated manager. She loves bookkeeping and would mind mice at the crossroads for you.
- Izabela is their payroll expert. Unreal at payroll and loves it. You couldn’t meet a more helpful lady
- Dee, raising invoices and ensuring they get paid. Brilliant at it and all done in a very calm and respectful way
- Tax, VAT, and accounting expertise in the background when needed.
While the tech is excellent, it’s only as good as the person using it. The idea of using cloud-based technology is to benefit all. Transparency over the numbers, going paperless and access of bank statement going straight to Xero.
Business Snapshot
Lee now gets a weekly business snapshot every Monday. Aedin showed me the one for the previous week. The important numbers for them are
- What money they are owed from Debtors
- How much they owed creditors
- What’s in the bank
- VAT owed
- PAYE owed
- Balance on loans owed
The change from where they were with their finances to where they are now has been transformational. They have huge confidence in the numbers and the business. Money in the bank leaves them with funds to invest in the business. And invest in themselves too. Stan, Roy, Gus, and Lee are on more money and have more going into their pension pots. Plus, no worries about Revenue should they come calling. By investing in their finance function, they have added value to the business, too.
Why Outsource?
I came across an article from Grant Thornton on four benefits of outsourcing. Simply put, they listed these as
- More time to do what you do best
- Access to talent
- Access to the latest technology without the cost or time of implementing it
- Personalised support
You cannot underestimate the value of personal support for a company director. Being a business owner can be a lonely place. Having that business partner that you can lean on when you need is vital. It helps you make more informed business decisions. Those decisions are backed by up-to-date numbers. It makes difficult things like accessing finance easier. How would a bank lender not be impressed when asking if the business has up-to-date numbers?
“Yes, we do, and here are the numbers for the end of last week.”
How does that compare to another business whose last set of accounts is the 31st of December 2023? Historic information that is 14 months out of date now.
Summary
First of all, I have to apologise to Paul Simon for butchering his song 50 ways to leave your lover. I know it’s a stretch to equate your lover with your bookkeeper, but stranger things have happened! Don’t you need to trust and have confidence in both?
This is not an attack on bookkeepers. There are many brilliant bookkeepers out there who are doing amazing work for not enough pay. There’s a solution if you hate doing this stuff, aren’t trained to do it, or what you have isn’t working. Having an outsourced finance department can be a no-brainer in a way, especially when you can walk away after 3 months. You won’t because it works, but there’s work for you, too, to get it right. When you do, you’ll know. So
Make a new plan, Stan
You don’t need to be coy, Roy
Just get yourself free
Hop on the bus, Gus
You don’t need to discuss much
Just drop off the key, Lee
And get yourself to Comerford Foley
Want to make a new plan to get yourself free? If so, start here
