Entrepreneurs and small business owners are good at wearing a bunch hats. They’re the marketing department, the production assistant, the CEO, the customer service rep and much more. Odds are that if you’ve been in business long, you’ve learned quite a bit about finances (or you want to) and you might have even gotten pretty savvy at handling your books, but eventually doing it all starts to wear a bit, and it brings more stress, less time, and even a struggling business. Many of our clients have started with the simple question, “How do I know when to hire a professional bookkeeper?”
So today we’re sharing a few tips on how to know when to stop doing it yourself and start giving it to a professional bookkeeper. If you find yourself nodding your head in agreement to what you read below, lets talk. We’d love to learn about your business and see if our services would be a good match – we’ve got a pretty good idea that they might be!
It might be time to hire a professional bookkeeper if…
Your Books Are Never Up To Date
We get that it’s hard to sit down and wade through the paperwork that makes up your company’s finances. But if your books aren’t up to date, you’re probably not really as financially aware of where your business stands. That means you’re operating more on risk than you have to. Knowledge is power – having your books up to date means you’ve got the info you need to gauge the current health of your business.
Bookkeeping & Finances Take Up Too Much Of Your Time
Like we said before, running your business means you’ve got to keep tabs on a lot of different moving parts. We’re always impressed with the entrepreneurs and small business owners we work with – they can manage a lot. But it’s not worth losing your passion for your business. If you’re finding that you’re spending more time in areas that you don’t love (say the bookkeeping and invoices) and less time doing what got you started in the first place (customer service or creating your products) then it might be time to hand it over to a professional.
Instead of stressing about what it would cost and how much you’d hand over, look online to see what offerings are out there. Ask other business friends who they use or what they do, and even set up an appointment with your current accountant (or a new one!) and talk to them about what they’d recommend. You’ll have a better handle on what it might cost to hand your bookkeeping over to someone else and you’ll also know what you’ll be able to gain from using their services as well. That’s a win!
You Don’t Know What Your Cash Flow Is
If you’re not sure what cash flow is, it’s basically how much money you have moving in and out of your business at any given time. Knowing that number means you’ve got a good handle on the success of your business. You’re aware of how much you’re spending and earning, and you’re keeping tabs on bills you need to pay as well as invoices you’ve sent out that need payment.
With a professional bookkeeper keeping track of the finances, you should have access to your cash flow number at any time. That might not be the case if you’re doing your books yourself or if they’re not currently up to date. Not knowing where you stand financially might not be hurting you, but it’s not helping you grow your business. A professional bookkeeper will provide you with what you need to know so you can start setting growth goals and have a strategy for taking on new ventures or expanding your business.
You Handle Your Books the Same Time You Handle Your Taxes
We’ve talked to some small business owners who have said “I don’t need a bookkeeper, we take care of it the same time we do our taxes.” And although we ourselves even offer these types of services we don’t really recommend this as a path you should choose over and over again. Here’s why:
- Accountants or CPAs usually charge more per hour than a bookkeeper does. That means you’re paying more for them to do a task that you could pay less for.
- Books that aren’t up-to-date aren’t helping you make good business decisions and that means you’re taking more risks in your business than you need to. Yes, it may not have been an issue yet, but having quarterly financial statements and cash flow at your disposal when you make decisions mean you’re limiting risk and using knowledge to your advantage – and that means you’re more likely to succeed.
- Accountants who do retro-active bookkeeping don’t always provide you with month-to-month records. These detailed records are often necessary to secure loans, or attract investors, not to mention help showcase the value of your business if you’re looking to sale it.
Your Sales Have Increased, You’re Busier Than Ever, But You Aren’t Making More Money
It happens more than you might think. Your business is growing, you’re busier than ever, but the money doesn’t seem to be increasing or it’s tied up so you can’t invest it back into your business or pay it out to yourself or your employees. If your revenue is increasing but your bottom line doesn’t seem to budge that means you need to increase your profit margins.
The documents and reports that you’d receive from a bookkeeper not only prove that your hunch (the one where you’re working hard BUT NOT MAKING MORE) is actually true, but they’ll help show you were to cut costs so you can make your business more profitable.
Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.