Helping a Business Catch-up with their Bookkeeping has Risks. Here are the risks for Rescue work?
There is no doubt that opportunities are abundant in the world of catch-up bookkeeping. This is because even the most organised among us have at times let things slide when it comes to our businesses money matters.
However, if you are taking on this kind of bookkeeping work, it is important to remember that it can come with some significant risks and pitfalls that you need to identify and plan for.
Uncovering the risks of catch-up bookkeeping
If you are dealing with someone who is months or years behind in their bookkeeping tasks, you need to be ready to deal with a host of potential issues that can make your work and quoting more difficult.
If your client is significantly behind in their bookkeeping tasks, it is likely that they will have lost at least some of their receipts.
If this is the case, you will need to
- give the client time to gather all the records that they are able to,
- remind them of the task if they drop out of communication, and also
- explain that any purchases in excess of $82.50 for which they cannot locate a receipt, will not be claimable.
While this will be disappointing for the client, explain that clearing the backlog and getting out of harms way is the ultimate goal, and encourage them to keep moving forward.
You can also suggest ways to help your client stay organised in the future by implementing the right technology for their business.
Where a client has fallen into disorganisation, you will have to deal with unreconciled bank statements and unmatched transactions. When this has happened you may have to factor in additional time.
If the client is significantly behind, you could be dealing with huge amounts of records covering several financial years.
If your client is a long way behind, they are likely to be in a state of overwhelm, unable to see the forest for the trees.
In this case, it may be difficult for them to understand and follow through on the tasks they are being asked to complete, particularly if they are very busy doing other work that EARNS THEM MONEY. Some business owners think good finances is just a cost and they may struggle to do the work to help you help them!
If your client is stressed, you will need to break down and simplify the tasks into “chunks” that are clear and manageable, and remind and encourage them to complete the small steps as you proceed.
Issues with the ATO
In some cases the ATO may already be involved, or soon will be. In this case, your client will be under significant pressure, and may have been avoiding even thinking about the issue.
If this is happening, you will need to reassure your client, and explain exactly what can be done to get them on the right track, and that the ATO can be good to deal with if you communicate well and show progress.
Where you can identify client stress and provide a solution or even just simple reassurance, they will be easier to work with.
Potential for non-payment
Given that your client is so behind, it may be that they have a pattern of being disorganised and that may include non-payment or late payment for some of their bills.
For example, 10 hours in advance at a time, or by particular milestones if there are any that are sufficiently clear.
Your billable hours
All of the risks and issues outlined can make it difficult for you to assess the exact parameters of the job, and how long it is likely to take you.
You will need to make this clear to the client, and let them know that it may be difficult initially to estimate the scope of the job with complete accuracy. However, after you have completed the first portion of the work, you will be able to provide a more precise assessment.
You should also make it clear that the more organised they are, the easier (and cheaper) the bookkeeping will be. To be organised is to
- make sure that all invoices have been sent,
- business and personal transactions have been separated, and
- accounts received have been logged.
If they need help with these “regular” bookkeeping tasks you can let them know you have a different rate or fixed price package.
Benefits of catch-up bookkeeping work
While catch-up bookkeeping work does bring with it a particular set of issues, there are also some advantages. With clients who are struggling to organise, you are able to offer skills, expertise and insights that can lead to further work.
For example, you can offer to implement a receipt tracking system to help them in the future, or if they are ready, you can help them to implement and manage automation and integrations.
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