Even worse is the possibility of mixing up customer transactions. At the very least, inaccurate record-keeping provides an incomplete view of your overall business financial profile. When considering why hire a bookkeeper, the penalties is the next thing to consider. There are various types of taxes all businesses must file periodically. Although filing is generally easy, a missed deadline can result in comparatively hefty penalties. According to the IRS, around 47% of penalties they collect are due to delinquent filing.
Good bookkeeping is not merely crunching numbers and should include identifying patterns in your business finances with a growth-centered approach. Are you finding it hard to track your customers’ sales or expenses? Missing a single line item is not only bad business due to loss of income, but can come across as incompetent or amateur if the client discovers it.
That money would be better spent on marketing to grow your business. Hiring a bookkeeper removes multiple “To Do” items from your already busy list, avoiding financial loss due to penalties. Bookkeepers are intimately familiar with these sorts of transactions and can take over recording and managing your business’s financials on your behalf. In addition, a skilled bookkeeper can train you on the best practices to record, manage, and interpret your financials, and how to input that data into a versatile bookkeeping app. It’s important to remember that bookkeepers aren’t necessarily accountants.
Having a bookkeeper to handle those tasks for you gives you back hours of your week — and in a year, those hours can add up quickly. You can focus on doing the tasks you love without having to slug through the tasks you dread. Suppose you went all year without preparing monthly financial statements and then handed off your business records to an accountant to file your taxes. They’d have to go back and prepare financial statements retroactively—effectively, doing a bookkeeper’s work.
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Hiring a great bookkeeper is essential to growing your business. If you hire a bookkeeper, you need to make sure your newly-hired employee has QuickBooks skills. There are several reasons your bookkeeper needs hire a bookkeeper to have QuickBooks experience. With all of the advantages to a QuickBooks program, why would you need to hire a bookkeeper? The most important reason you need a bookkeeper is for financial record keeping.
- A freelance company beginning requires the founder’s full attention, including his or her commitment to developing the concept into a practical product or service.
- Once you treat the time you spend bookkeeping as an actual expense in cash, you’ll have a better idea of whether you should keep doing it.
- Accountants are usually more skilled and in a more advanced position than bookkeepers.
- This will assist you in making decisions about where you can or should allocate, invest, or cut down.
- Hiring a bookkeeper is financially practical, saves you money in the long run, and protects your time and energy.
- When a qualified bookkeeper is on the job, financial statements are prepared properly and according to accounting standards—so your accountant can quickly and easily file your taxes.
- Starting a business needs your full attention and focus on every single aspect.
That means that, as that founder, your time should be devoted to strategy, marketing, funding and other key areas that require your focus over the daily operational tasks of a business. As we’ve covered in this guide, a bookkeeper is highly valuable to a small business and can provide more services than just financial recording and compliance. Often a bookkeeper will specialize in a particular industry, so it pays to ask them about this so that they can add even more value. Make sure that you get the best out of your business by hiring a bookkeeper to help you along your journey. They can also offer day-to-day support for small business owners. In fact a good bookkeeper is your partner in keeping things running smoothly within your business.
Meaning that, if you’re doing your bookkeeping on your home computer, there’s a good chance someone else has (or will eventually have) access to your business’s financial info. What’s more, if your books aren’t up to date, you’ll have a ton of catch up bookkeeping to do during tax season, making a typically stressful time of year even more difficult. First, start tracking how much time you spend per week on bookkeeping. Then, using an online calculator, determine how much your time is worth, and figure out how many “dollars” you spend on bookkeeping per month. You should consider your business’ needs, transaction volume and budget before you hire a bookkeeper. A bookkeeper can make it easier to do your taxes and give you more time to run your business — but they can cost more and take time to get used to.
They will work with you to maintain accurate financial records throughout the year. This will include keeping track of your income and expenses and any other transactions that could impact your taxes. Come tax season, your bookkeeper will be able to provide you with the information you or your accountant needs to file your return accurately and on time. As a result, you’ll be able to relax and focus on running your business, knowing that your taxes are in good hands.