Is the Person Handling your Accounting the Best Person Suited for the Job?
As a small business owner, deciding where and how to spend your money can be a difficult decision. Most will opt to reinvest their profits into products, equipment, or services that will help to generate additional revenue rather than on services to help track and manage their finances.
I totally get this! After all, it’s the revenue that keeps the lights on and the employees paid. But who is making sure that the bills get paid and payroll gets processed? If your answer to this question is not “a highly skilled bookkeeper with accounting experience that understands my business and can help me understand the numbers and grow,” I suggest you read on. If you think the person currently in that role is as described above, you might still want to read on to validate your belief.
Finding the Right Person
In an effort to help evaluate or find the right person for the job, I have broken down the description of bookkeeper as follows:
- Highly skilled – Has experience with the accounting system, knows how to use, diagnose, and resolve issues as they arise (without making a bigger mess).
- Accounting experience – Someone that has knowledge of all accounting functions and understands state and federal regulations related to payroll and sales and use tax (not just someone that took an accounting course in school).
- Understands my business – Takes the time to fully understand what the business does, how it operates, and what the goals of the business owner(s) are (not just what product or service you sell).
- Helps me understand the numbers – Someone that really knows how to read financial reports and make sense out of them (need I say more?).
- Grow – Someone that can help you make critical business decisions to help grow your business (Now that’s what I’m talkin’ ‘bout)
Where Most Business Owners Go Wrong
Many small businesses make the mistake early on of not thinking that the day-to-day accounting function in their business is important. After all, they can just drop off the checkbook register and box of receipts to the accountant at the end of the year and he/she will waive their magic wand and turn them into a tax return.
Here is what is wrong with this: All the tax preparer is doing is reporting history. What if they find something that went wrong? What if you made far less money than you thought and are in deep financial trouble? Or, what if you made more money than you thought and end up with a HUGE tax bill? How many times have you said, “…if I only knew?”
Remember that “highly skilled bookkeeper with accounting experience that understands my business and can help me understand the numbers and grow” that I described earlier? This person would have been able to track this information for you throughout the year, helping you to make the changes necessary to avoid hanging that ‘going out of business’ sign or writing that HUGE check to the IRS
But Do I Really Need a Professional Bookkeeper?
If you still think that you don’t really need a professional bookkeeper, here is my point of view on some of the most common reasons I hear from small business owners:
“I need to do it myself so that I know what is going on.”
Why are you spending time doing bookkeeping when you could be putting that time to better use: growing your business? You don’t need to be doing the work to know what’s going on. You do, however, need someone that can provide you with easy to read financial reports that provide you with clear, concrete evidence of how your business is performing.
“My business is not that big and there is not that much work.”
As a rule of thumb, if you spend more than 1 hour per week (and be honest!) managing your bookkeeping, you are big enough to have a professional bookkeeper handling your work. Chances are you are only capturing the minimum amount of details…
“I can’t afford a bookkeeper.”
You can’t afford not to have a bookkeeper! There have been countless times when we have identified bank, billing, or payment errors on behalf of our clients that have saved them more than our service costs. In addition, having a clean set of books is an invaluable tool when trying to get investors or financing for your business. This could also save you money at year end; tax preparation is less expensive when your Accountant doesn’t have to spend hours trying to clean up the mess that you created.
Do I Have Your Attention Now?
If I do and you are ready to really take your business to the next level, do your homework and find the right person for the job, just like you would for any other job in the business. I would suggest that you begin with finding a reputable outsourced bookkeeper. Despite what you think, this is usually the most affordable option and their work is usually a much higher standard.
We Can Help
Think Beyond the Desktop provides outsourced accounting services to fit your business needs and budget. Check out our website or contact us today to learn more. We’ve got the solutions your small business needs (and the outstanding reputation to back up that promise).