Is Doing Your Own Books Costing You Money?
As entrepreneurs, we tend to focus on the areas of the business we like most: the fun stuff – creating, working with clients, brainstorming ways to grow. Chances are none of us started our businesses to be buried in mountains of paperwork. So, what do we do? We set aside the mundane daily grind of running a business to focus on the sexier stuff and administrative “busy work” gets pushed to the bottom of the list.
This is natural for many – even most – entrepreneurs, but it begs the question: is our inability to prioritize less desirable tasks costing our businesses money?
If that giant pile of papers is untracked spending and unreconciled bank statements, it is likely the answer is yes. If you’ve got a sheepish look on your face no one can see, I’m guessing you’re guilty.
Many of us (yours truly included) don’t keep up with our books on a regular basis because it is one of the easiest things to push aside. As if the time suck isn’t bad enough, there’s also the confusion of figuring out how to use Quickbooks or Xero, deciding how to divvy up that client entertainment meal or how to enter the interest you paid on your business credit card. It is the frog no one wants to eat (and if you don’t know that reference, I highly recommend the book Eat That Frog by Brian Tracy). How many times have you said to yourself: “it can wait another month.”
Unless you’re a small business owner whose business is bookkeeping, I bet I’m resonating with you.
Maybe it is time to consider some professional help. I think small business owners assume that hiring a bookkeeper is going to cost hundreds of dollars a month, but that’s not the case, and what you do spend will come back to you in time. Imagine what you would do with 4 – 6 hours (or more!) of additional time to work your business and do what you’re good at: bringing in the dough. Well, hiring someone who knows how to handle your books can do just that. And, since it takes them about half the time to fumble through the data entry and reconciliation, you end up with better records in half the time.
Better bookkeeping, whether you choose to have it done by a professional or just commit to doing a better (more consistent!) job of it yourself, can do many things:
Protection: Accurate bookkeeping helps keep your records in line with the requirements of the IRS, so you’re less likely to get hit with an audit or adjustments to your tax return.
Deductions: Did you know that lunch for your employees should be tracked and written off differently than a meal with a client. These are the types of things a qualified bookkeeper can help explain and accurately track while maximizing your deductions. If you’re not aware of every penny you can write off, then your bookkeeping practices are costing you money.
Accountability: A bookkeeper can help you stay on track with your financial documentations, so you’re not behind the eight-ball come April 15th. Proper bookkeeping helps you prepare for tax day during the entire year. This makes filing quick and easy, and can help avoid the trusty extension….and interest charges that come with it if you owe.
Financial Snapshot: If you’re not watching the numbers then you don’t really know how your business is performing. Updated financials give you a clear picture of what is coming in – and more importantly, what is going out.
While a professional bookkeeper is the preferred way to go to achieve the most out of your financial record keeping, it isn’t required. If you’re too short on funds to hire someone regularly, or you’re just too stubborn to give up the task, set up a brief consult with a professional to make sure you’re doing the job correctly and saving as much money as possible.
Either way you go, we want to stress the importance of good financial record keeping and the difference it can make – not only on tax day, but throughout the entire year.
If you do want to explore the option of outside bookkeeping help, visit www.easybizstart.com/bookkeeping for more info on our bookkeeping partners. With monthly services as low as $200, you really can afford to give this work to a professional so you can focus on what’s most important to you: growing your business.