14 Jan 20 Audra Walter
Doing your own books can be a good idea for a while. However, most successful businesses eventually reach a point where not hiring a bookkeeper can become detrimental to the firm's productivity. Learn the 4 biggest reasons why your business needs a bookkeeper here.
Knowing when to hire a bookkeeper is not always the easiest determination. In some cases, there is no clear point at which it becomes obvious that a bookkeeper is necessary. Some small business owners can continue on without a bookkeeper longer than others. But, if your business grows in revenue, size and complexity, eventually hiring a bookkeeper will become financially beneficial. In this post, we will go over a few signs which may indicate that it makes financial sense for you to hire a bookkeeper. 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. As we’ll see, bookkeepers can create value in a variety of ways, and at certain stages of your business they may be almost indispensable.
When you do identify that you need a bookkeeper, one of the next big questions will be: how do I find one? Luckily, the professionals at Boxelder Consulting are capable of meeting your bookkeeping needs. We offer a range of bookkeeping services and can develop a game plan which is tailored to your unique situation. Get in touch with us today at 303-317-6111 to learn more.
1. DIY is Taking Up Too Much 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. You’re likely able to do your books yourself without taking too much time away from other things. But, as your business grows, you’ll likely start to find that the DIY approach takes away too much 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. You may be worried about cost, but you need to remember that time is money. When you hire a bookkeeper, this will free up a significant quantity of time which 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
If you do your own books, you may be to produce financial reports with a high degree of accuracy. But as your business grows and expands, keeping accurate records will become increasingly difficult. If you’re starting to notice that you’re records are slipping in terms of accuracy, this may be a sign that it makes sense to hire a bookkeeper. There’s nothing wrong with DIY bookkeeping, but handing over these responsibilities to a specialist will almost always lead to greater accuracy. Keeping your books accurate is essential to the health of your business. Suppose your books show a higher level of financial wellbeing than is actually the case for your business; if left unchecked, this state of affairs can have very negative consequences for your business.
3. You Don’t Want to Overpay for CPA Fees
Typically, a CPA will charge higher fees than a bookkeeper. If your CPA is spending a very significant chunk of time to prepare your return when you hand over your documents at the close of the year, this may be another sign that a bookkeeper is necessary. Not only will your records be more accurate, a good bookkeeper will be able to take note of the more common tax deductions. These things will cut down the amount of time your CPA will need to prepare your return. So, not only can a bookkeeper help you maximize your margins, he or she can also help you save money when it’s time to file your company return.
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 times, business owners increase their revenues, but don’t increase their absolute profits. This can happen when a business incurs additional costs as it expands its revenues. 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 out. 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
Again, there’s no bright line rule which you can use to know exactly when you should hire a bookkeeper. But these signs can help. If you’re concerned about your CPA bill, or cutting down on record-keeping errors, or maximizing your profits, you may want to hire a bookkeeper. Fortunately, the team at Boxelder Consulting is available to assist with bookkeeping services when you have the need for them. We can help you maintain your books so that you can focus on growing your business. If you have a need for bookkeeping services, don’t hesitate to reach out to us. One of our professionals will evaluate your situation and determine how we can be of assistance. If you’d like to learn more, call us at 303-317-6111 today.