It’s not always easy to know when it’s time to outsource your bookkeeping. Some small business owners can continue on without a bookkeeper longer than others. But as your business grows in revenue, size and complexity, hiring a part time bookkeeper will become a necessity.
In this post, we’ll go over our top four reasons why business owners should outsource bookkeeping services. This list isn’t exhaustive; there can be plenty of other signs which can indicate that hiring a bookkeeper may be a good decision. But this should get you started.
We’ll also show the proven benefits of outsourcing your bookkeeping. Outsourced bookkeepers create value in a variety of ways, and at certain stages of your business they may be indispensable.
1. DIY is Taking Up Valuable Time
In the early stages of your business, you’re likely performing many of the functions of a bookkeeper on your own. In a sense, you are a “Do-It-Yourself” (DIY) bookkeeper by default. You’re keeping track of your expenses, your income, your receipts, and so forth. You’re also probably taking note of the expenses which will likely yield deductions when tax time rolls around.
In the early stages, the DIY approach might make sense because your books are relatively simple. But, as your business grows, the DIY approach will consume more and more of your time. If you’re scrambling to do your books while you juggle your other duties and tasks, this may be a sign that a bookkeeper is necessary.
If you’re worried about cost, remember that time is money. You already have a full time job running your business. When you hire a bookkeeper, your time can be directed toward the completion of other tasks, and that will almost certainly lead to greater revenues.
2. Your Books are Starting to Show Errors
Early on, you may be able to produce financial reports with a high degree of accuracy. But as your business grows and expands, keeping accurate records will become increasingly difficult. The more complex the financial data coming in, the harder it will be to keep accurate books. And without accurate data, it will be near impossible to produce financial statements (balance sheets, cash flow statements, etc.) that properly reflect the health of your business.
If this is the case, it may be time to hire an expert.
There’s nothing wrong with in-house bookkeeping, but handing over these responsibilities to a specialist will almost always lead to greater accuracy. Keeping accurate books is essential to the health of your business. Unchecked mistakes will compound over time, and have severe negative consequences for your business down the road. Boxelder Bookkeepers use state-of-the-art accounting software to make sure no mistakes pass through un-corrected.
3. You Don’t Want to Overpay for CPA Fees
Typically, CPAs charge higher fees than bookkeepers. If it takes your CPA a very long time to prepare your return each year, this may be another sign to look for outsourced bookkeeping. Not only will your records be more accurate, a good bookkeeper will be able to take note of the more common tax deductions.
Outsourced services will cut down the time it takes your CPA to prepare your tax return, providing you real cost savings. So, not only can a bookkeeper help you maximize your margins, he or she can also help you save money on tax preparation.
4. You Want to Maximize Your Profits
As your revenues increase, you will want to make certain that your profits are as large as they possibly can be. Many growing businesses fail to increase their profits along with their revenue. This can happen when a business incurs additional costs as it expands.
The best way to deal with this type of situation is to hire a bookkeeper, because a bookkeeper can take the time to prepared detailed financial reports which show precisely how your funds are being spent. In turn, you can use these reports to help determine which costs should be cut. Cutting out unnecessary costs will increase your profit margin. It’s great to take in additional revenues, but if those revenues don’t lead to more profit, your pocketbook will ultimately feel the same as did before.
Reach Out to Boxelder Consulting Today
If you’re concerned about your CPA bill, cutting down on record-keeping errors, or maximizing your profits, it may be time to hire a freelance bookkeeper. Fortunately, the team at Boxelder Consulting offers full-service outsourced bookkeeping and tax accounting services for growing businesses.
We can help you maintain your books so that you can focus on growing your business. If you have a need for bookkeeping services, call today for a free consultation of your bookkeeping needs. We’re excited to meet you!