In the initial days of your business operation, you may have taken the majority of bookkeeping and accounting duties on yourself. Early on, limited numbers of workers and clients, as well as relatively small streams of income and expenses, make keeping adequate records fairly manageable by yourself.
But as your company grows, hiring a financial professional to take care of all your accounting records becomes more critical to the success of your organization. Professional bookkeepers facilitate smooth financial management and efficient operation of your business, and can also save you considerable sums of money.
Cutting Down on Responsibilities
When you started your small business, you probably took on a large portion, if not all, of the total operational responsibilities for the business. As your business grows, and it hopefully will, operational responsibilities increase, sometimes exponentially, and may quickly reach the point where running the business simply can no longer be a one-person job.
Many business owners, in the process of trying to address job responsibilities, unfortunately overlook financial and accounting duties. Taking that path, even unintentionally, is bad fiscal and managerial policy, and can end up costing your company dearly. Ramifications for a business that fails to keep adequate accounting records can mirror the devastating consequences that precede a Fortune 500 company going out of business.
Hiring a professional bookkeeper frees you up to attend more to the central responsibility of managing and growing your business. Reducing the number of stressful tasks that use up your attention on a daily basis helps you function more efficiently in your role as owner and manager, and should ultimately result in increasing the financial fortunes of your company by a margin much more than the cost of the services of a professional bookkeeper.
While it’s fairly self-evident, it’s worth reiterating that hiring a bookkeeper means your finances are managed by a professional. Regardless of how educated you are, it’s a safe bet that a professional bookkeeper will manage and keep track of your finances better than you can personally.
Yes, you’re paying for the privilege, but consider the fact that you’re shelling out money for accurate, well-organized, and cost-effective records of your company’s money. In a sense, you’re not only paying for accuracy, but for the peace of mind and expediency that a professional bookkeeper provides.
Ultimately, the expense is more than just worthwhile. Keep in mind that if you did your own bookkeeping, any mistakes could potentially have serious immediate and long-term financial consequences for your company. The time it takes to find, correct, and redo errors may put an additional significant divot in your company’s finances.
A professional does things right the first time and helps avoid spending more time and money to repair bookkeeping errors. Most accounting professionals have extensive skills and training that enable them to facilitate everything from handling payroll and tax deductions, to managing monthly interest and other bill payments, and even overseeing necessary government payments and possible insurance matters.
In short, paying for a professional is worth more than his or her weight in gold when you carefully consider everything provided.
Because you run a small business, there’s an excellent chance that you can save money by outsourcing bookkeeping operations. By outsourcing, you avoid the cost and time-heavy process of finding, hiring, training, and paying an employee whose sole responsibility is to keep track of your company’s financial transactions. You may be able to save even more if you consider retaining an independent freelance bookkeeper as opposed to the services of an accounting firm.
Hiring a bookkeeper or accountant who does freelance work means you’re hiring someone who works for himself or herself and is therefore probably good at keeping his or her own operating costs down. That fact may ultimately reduce what you have to pay for the service. As long as your company has fewer than 30 employees and doesn’t exceed $1 million in total annual revenues, you may very well only need part-time bookkeeping services.
Financial Reporting Accuracy
Bookkeepers have financial expertise, which means outsourcing the work increases the accuracy of financial reports. Bookkeepers are familiar with various types of records and the types of information businesses need in different situations.
Instead of the business owner researching accounting rules, learning how to use software, and putting together their own financial reports, bookkeepers handle all of this for them. That saves time, money, effort, and energy and reduces the risks of small errors that can completely throw off the information.
Tax season is a stressful time for all, including small businesses. The necessary process can be incredibly time consuming and draining. Whether using a full-time bookkeeper on staff, or opting for outsourced assistance, benefits at tax time are considerable, especially with increasingly complex tax codes. Having your bookkeeper handle your taxes will save you time and money, and possibly some physical and mental anguish. Your bookkeeper knows the ins and outs of your company, and has easy access to all of the information needed to complete tax filings correctly.
The bookkeeper’s experience, with both your company and with taxes in general, makes him or her the best choice for handling the task. With assurance that taxes are properly handled, your company may benefit three-fold at tax time: financially, mentally, and physically. A professional bookkeeper is a valuable financial asset for your company, one that typically more than pays for itself.
Efficiency of Tax Returns or Audits
Taxes play a large role in running a business, but not all small business owners have the time to keep up with the latest tax regulations and changes. They may be unsure of how to record expenses, store receipts, and manage necessary tax documents.
Working with a bookkeeper simplifies tax time because the financial pro can provide advice and help create the records necessary for filing taxes. That makes it faster and easier to prepare tax returns, and in the event of an audit, well-organized records help the process to go smoothly.