According to an article by Michael Flint entitled “Cash Flow: The Reason 82% of Business…
For many small business owners, the temptation to go it alone can be quite an alluring force. After all, your profit margin doesn’t have a lot of room for error, and the idea of cutting out costs by doing it all yourself sounds appealing. However, bookkeeping is one area of business management that can particularly benefit from a professional touch. Let’s examine some of the reasons why retaining a professional bookkeeper should be part of a successful business plan.
One of the most obvious advantages of hiring an expert is the valuable time it frees up that can be better spent on building your enterprise. This can be crucial, because when you try to do everything yourself you can quickly get bogged down and lose focus. Having a bookkeeper watch over your finances allows you to hone in on more fundamental front-end aspects of your business such as new business development, customer relationship management, and maintaining product/service integrity.
Another advantage is that professional bookkeepers ensure that all transactional data is entered correctly and coded properly. This ensures that all financial information is both accurate and easily accessible. It also ensures you can make well-informed management decisions based on robust, accurate financial reporting.
A bookkeeping firm can also assist with account reconciliations, benchmarking, trend analysis/projection, optimization of cash flow, and profit maximization. In addition, they can provide a holistic financial viewpoint of your business through real-time reporting, offer suggestions for best practices, assist with financial planning, and warn you if you’re making financially unwise management decisions. Having an expert on hand who is capable of providing insightful analysis serves to help you avoid potentially costly setbacks.
Given the multitude of different tasks involved in managing your own business, it is not uncommon for a bill to get lost in the shuffle. Bookkeepers ensure that your accounts payable are current, available in real-time, and effectively managed. Paying your bills on time is critical as it ensures that valuable resources are not expended on late fees and service charges. Timely remittance is also conducive to the cause of maintaining good credit terms with your network of vendors.
Knowledge of financial reporting and tax requirements is another area of expertise that bookkeepers possess. Compiling financial statements, properly generating W2’s and 1099’s, managing payroll tax liabilities and filing obligations, as well as other support functions, will help you to avoid costly penalties and give you the piece of mind of knowing you are in full compliance with all applicable laws and regulations.
While it is tempting to go it alone when running your own business, it is important to know your limitations and outsource accordingly. Online resources can be more economical, but a lack of appropriate accounting expertise can result in unnecessary struggle and wasted time. CPA’s are phenomenal resources, but are often localized and relatively more expensive. As a result, the middle ground is often the ideal option for the small business owner as bookkeepers can typically deliver exactly what you need at a much-reduced cost.