Whether you are just starting your business or you have been in business for many years, proper financial record keeping is essential to your success. And frankly, it is the law. So with all of the do-it-yourself software out there, why should you hire someone to keep your books instead of saving money by doing it yourself?
In our own business, we focus on our strengths and seek expertise elsewhere. We may have more business law knowledge than many other bookkeepers, but we are not attorneys. We may be fairly technologically savvy, but we are not web page designers. We may be masters of spreadsheets, but our time is better spent on other tasks. Because of these things, we have an attorney, someone to handle our website, and we use industry-current software to serve our clients. That is just good business and is part of the cost of doing business. In the end, it saves us money and time – and that IS good business!
But don’t just take our word for it, answer for yourself. For each of the reasons to hire a bookkeeper below, ask yourself the related question and let your answers guide you to your best business self.
Reason 1:
Your business needs you.
The time you spend working on your financials is time away from managing and growing your business. Your energy is best spent in finding new markets, building that addition, hiring new staff, creating more beautiful spaces.
Question to ask yourself:
How much time am I spending doing things that are not directly growing my business?
If the answer is anything more than a couple of hours a week, you need to hire a bookkeeper.
Reason 2:
Do what you do best and hire out the rest.
How do you build your business to be a household name? By being the best at what you do. Whether you are fixing cars, making floral arrangements, mowing lawns, or providing legal services; being the best at what you do sets you apart. So do what you do best and let other experts do the same – and let them do it for you.
Question to ask yourself:
How much time am I wasting trying to figure out things I don’t fully understand?
Again, if the answer is more than a couple of hours a week, you need to hire a bookkeeper.
Now pause and answer this question in relation to reasons 1 and 2:
How much is my time worth to my business? What is that at an hourly rate?
Say you determine your time to be worth $30/hour (yes, this is low, but don’t we all sometimes undervalue ourselves!) to your business and you spend even five hours a week keeping your own books, that is $600/month you are costing your business in actual productivity loss. If you look at small business averages, most studies find that small business owners actually spend an average of 10 hours a week handling their books, that is $1,200 a month lost. This does not even account for the personal loss of your time, which is worth far more in sanity and peace of mind – which leads us to…
Reason 3:
Find balance in your life.
If you take all of the hours that you spend on keeping your own books and re-allocate them to your personal life, you work to balance yourself. Most small business owners work well over 40 hours a week – yeah, I know, 40 hours is something you may not have seen for many years!
You may feel like you are married to your business. If you are actually married, this may put a strain on your relationship with your spouse. You may feel like you have to offer constant care to your business. If you are a parent, this may put strain on your relationship with your children. Or maybe you just wish you had a couple more hours a week to restore that old car, do some binge watching on Netflix, get out on the boat, or read a book.
Question to ask yourself:
How would I use an extra five hours every week?
There is no right or wrong answer, hire a bookkeeper and take that time back!
Reason 4:
Get a “second opinion” of your business.
Most people don’t understand the depth of an income statement, let alone what to do with the information. And most people aren’t trained to (or just don’t have the time to) seek out patterns in numbers to use as decision-making tools. Having a trained expert not personally vested in your business to go through your financials can find places to save money and make money that you may never have thought of.
Question to ask yourself:
How much do I understand my financial statements and status?
Even if the answer is that you understand them a great deal, think of how much time and effort you are able to give to interpreting all of your financial data. Likely there are better things you can do with your time and likely there are things you will miss that your bookkeeper will not. Consider you keeping your own books as being given a cancer diagnosis by a nurse at the beginning of a routine check-up and having a bookkeeper as the second opinion of an oncologist.
Reason 5:
Bills are getting delayed or missed. Invoices are going unpaid.
In other words, you’ve got problems. Maybe big problems. There are so many things to manage when you own a business that you have to prioritize your time. The tasks that are determined to be not as important get pushed down the priority list. So, to do the tasks that are frustrating or incredibly time-consuming. If bookkeeping is one of those things for you, it is easy to continue to push it off. And it is easy for it to go too far past okay.
Question to ask yourself:
How much have I cost my business because of mistakes, missed/late payments, or uncollected invoices?
Any amount is too high. If your answer is more than $0, you need to hire a bookkeeper
Reason 6:
Tax season is stressful and expensive.
The right way to use your accountant: bring them your financial statements when requested (generally quarterly to pay estimated taxes) and let them tell you what your tax refund is each year.
The wrong way to use your accountant: give them a year’s worth of financial receipts at tax time and hope for the best. This will result in many questions back and forth, incomplete managerial data for your business, and a much higher bill (CPAs typically charge much more for the basic bookkeeping items they will need to process your return).
Question to ask yourself:
Do I want to save money and have a peaceful tax season before I get my nice tax refund?
I think most of us would answer, yes. Then you need to hire a bookkeeper.
Whether you are ready now, in six months, next year, or you needed help a while ago – We are ready to talk to you about how our skills can help you and your business.
*A special note on bookkeeping software: even though mass-marketed bookkeeping software is made user friendly to allow savvy business owners to manage their own books, without training and/or understanding of basic accounting, it is very difficult to correctly enter and categorize expenses to offer the best, and most accurate picture of a company’s financial position.