Ok, so there are some entrepreneurs who get their kicks out of crunching numbers and getting paper cuts…me being one of them. However, for the most part, unless you’re a bookkeeper, I bet you didn’t start a business so you could do the bookkeeping.
Small business bookkeeping is one of the tasks most small business owners or entrepreneurs procrastinate on (no, you’re not the only one). Most people don’t like doing it but it’s something that can’t be ignored. The longer you put it off, the harder it is to catch up on. After a few weeks you’ll start to lose receipts (or they will fade) or forget what you spent that $117 on 3 months ago.
Bookkeeping can also be an incredible tool in growing your business. If the books are kept up to date, areas for improvement can be spotted and mistakes can be found before it’s too late. Trends can also be seen, which can determine where you’re spending too much or not enough.
Hiring a bookkeeper can save you money, can save you time, reduces stress and enables you to build your business. Here’s how:
Saves you money
Don’t have your accountant do your small business bookkeeping
Accountants are highly specialized in their field and handle analysis, structuring and consulting for a company. A bookkeeper is a more administrative role and fulfills the day to day financial tasks and management for a company. An accountant charges anywhere from $150-$400 per hour. You don’t want to have them fixing your mistakes and entering tedious transactions when you can pay a fraction of that for a bookkeeper. Save your accountant for financial consulting and corporate tax filing.
Keep up to date on payments and payroll
As a business owner, there are many expenses to keep track of. A bookkeeper will ensure you are up do date on any payments. This could save you hundreds or thousands of dollars on late fees and interest charges. It will also keep your credit in tip top shape. They will also ensure your employees are paid on time and that there is enough cash flow to cover payroll.
Reduces risk in human error
If you’re not familiar with small business bookkeeping there is a good chance mistakes will be made. If don’t know what you’re doing, it can take a lot of time for someone who isn’t familiar with your company file to fix it. This will end up costing you much more than if you had hired a bookkeeper from the beginning.
Saves you time
Get paid on time
You may be too busy to chase down client payments but even if you’re not, it’s difficult to ask clients for money. Having a 3rd party handle the collections keeps the relationship between you and your clients happy. A bookkeeper will also have strategies to get the payments on time with less conflict.
Liaison between you and accountant
Accountants and bookkeepers speak a similar language. Having them communicate directly can save the business owner a lot of time by not having to relay messages back and forth. There is also a holistic approach to your financial needs when the two professionals work together.
A bookkeeper will organize and file your receipts so they can be found quickly if needed. Also, who really likes sorting and filing receipts anyway? Online document management platforms such as HubDoc makes it even easier. There is no back and forth with paper documents and if something happens to a hard copy there is a backup. Virtual bookkeeping is the way of the future.
Do it weekly or monthly
Keeping up to date with your books takes it out of the back of your mind. You’re not constantly running numbers in your head, making sure you have enough money to make a certain payment. It frees up space in your head to focus on the task at hand. You’re also never having to wonder if your business is where you want it to be from a financial perspective. You will have monthly reports to compare and analyse. Plus, you’ll always know what you owe to CRA throughout the year.
If it’s not your thing, let someone, who’s thing it is, handle it
Think you’re impressing people by doing everything yourself? Think again. The smartest and most respected entrepreneurs know what they don’t know and surround themselves with a team of experts. The only way to grow your business is to delegate and outsource.
Gatekeeper for the finances
If you have a partner or partners, having an impartial person in charge of the finances when issues arise can be a invaluable. They can create and manage approval processes that partners must follow in order to withdraw or spend money. This is also beneficial for solo business owners who don’t necessarily have the best spending habits.
Enables you to build your business
Focus on the prize
Your business needs you to create, sell, produce. Your specific gifts and talents shouldn’t be wasted on business tasks that keep you from doing that. You cannot create strategies or improve on products or services if you’re worried about your books.
Getting an outside perspective
It always helps to have another set of eyes, other than yours on your finances. They may see things that you would never spot…ways of saving money, areas where you could spend more (marketing, training etc). They can see the big picture when sometimes the business owner is too ‘close’ to the business.
Don’t burn out
If you’re doing everything and working countless hours every week, when do you have time to do the things you love? If you’re not living a balanced life, there is no space for you to come up with ideas for new products or services or to expand your business. Don’t fizzle out, your business depends on it.
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If you’re not sure which small bookkeeping tasks to do and when to do them, here’s a FREE checklist to take the guess work out!DOWNLOAD CHECKLIST NOW