As a small business owner or an entrepreneur, you can’t focus on the daily bookkeeping of your business transactions. You got reasons which are valid too. At the start, the burden is a lot lower and you have to keep your cost minimum as you’re trying to run a tight ship.
But as your business grows your tasks to do increase and with so many responsibilities and the limited time you go for the options like outsourcing services or hiring professionals.
Drawbacks of Bookkeeping on your own
Doing your books on your own is not a milestone in starting your business. You don’t even need to use excel, some templates will go. You would hardly think about hiring one to do your bookkeeping for you. But with time when your business grows your financial transactions grow, it becomes inconvenient to manage all your own. You need to focus on your business growth more.
Some major signs alarm you about your business bookkeeping.
Backlog of Receipts and Bills
Do you have any box filled with unpaid bills and lots of receipts which haven’t been recorded in your accounts yet, untracked payments, and unreconciled bank statements? Now tackling any accounting will be the daunting and inconvenient cause of your outdated books.
Could be because of the unlinked systems, as if you are using a different application for invoices, a different application for billing different applications for tracking business financials.
You don’t have enough time for everything
When your business is growing your clients are growing you need to focus on your clients, customers, and different marketing strategies. There will be more, high billings volume and more back-office paperwork.
Doing your books required time, if you feel you are out of updated books you may discover bookkeeping services that outsource your required tasks.
Updating books only for tax season
I recently just did my accounts for the tax season, sent me excel sheet and bank statements along with expenses and income to an accountant for reconciliation and calculating my tax. He then reviewed my documents and let me know how much the tax I had to pay. Does this sound familiar? It sounds great to deal with your accounts but there are some problems with this, just take a look.
- You don’t update your important financial statements.
- This way you pay more to accountants than you could to a bookkeeper.
- And you get swamped with the work in tax season.
You missing tax deductions
Many business tax deductions are tax-deductible according to the IRS including digital downloads. Cell Phone bills, and online subscriptions. You can use these to lower your total tax owed. But the chances are you have missed lots of tax deductibles as you didn’t have time to track them.
You feel like you need time from the grind
Doing multi tasks on your own makes you tired? Do you want a break from daily bookkeeping which is growing day by day? If you are feeling like this consider outsourced bookkeeping services to free some time for your personal peace and cultivate your passion for work.
You can use this free time and headspace to focus on your passion and force to improve your skill set.
You’re not into Bookkeeping
You might be an expert at some other field of work, you might be a good business developer or manager or just lack confidence in bookkeeping. If you have doubt on this try to focus on roles you are confident about and let it go in the hands of professionals.
Unpredictable cash flow
Have you ever got out of the cash at the end of your month to cover your expenses? Many scenarios can cause this shortage, like unforeseen expenses, late payments from clients which just outstripped your income. And causing you a cash flow shortage.
The solution for this problem is simple which is timely bookkeeping. The right bookkeeper with bookkeeping software will help you gauge this problem and keep your check on cash flow and will let you have a cash flow statement.
Keeping you distracted from high growth works
As you’re doing your bookkeeping on your own you’re wasting your time over the thing which has a high opportunity cost, being an entrepreneur you could just use this time somewhere which will give you more profit and have low opportunity cost, like branding your company, strategy and your developmental growth. Could be marketing.
Long and short
Being small business owners we pride ourselves on a DIY approach. But this approach in Bookkeeping becomes a headache and drains your energy which is very productive and can lead you to the top if you just serve it some high production tasks.
Hiring virtual bookkeeping services will help you to keep your books up to date and are more affordable than hiring an accountant.