All business owner’s have to do some form of bookkeeping. It may be recording transactions daily, or handing a pile of receipts and bank statements to your accountant once a year. Just because there are parts of the bookkeeping process that you may have to do, overall most of your bookkeeping should be outsourced to someone who knows what they are doing and can provide amazing bookkeeping.
You have to make business decisions almost daily, many of them involving finances. What I consider the most important reason to make sure your bookkeeping is amazing is for decision making. If your bookkeeping is not accurate or up to date you may be making major decisions based on inaccurate numbers or old data. I see a lot of business owners who do their own bookkeeping, or do not use a qualified bookkeeper, and think their books are accurate. Once a cleanup is done some of the numbers on their financial reports are considerably different. So decisions on how much money to take out of the business or how many employees to keep on staff in the slow months are made using very wrong numbers. Owners may take too much money out of the business and not be able to pay bills in the coming months.
The accuracy of your books matters to the IRS and state government as well. The most common errors I see in regards to taxes are payroll errors. Both wages and taxes are commonly recorded with the wrong amounts or to the wrong accounts. This can mean that quarterly payroll tax numbers do not match the numbers on financial reports. This may not seem like a big deal now, but if your business were to get audited you need to make sure that all the numbers you reported on payroll, personal, or business taxes match the numbers in your accounting software and on your financial reports.
If you are doing your own bookkeeping, you may not know if you are doing it 100% accurately and may not keep it up to date. This can cause a constant underlying low amount of stress or a large stress during times like tax time. Having a professional bookkeeper perform excellent bookkeeping means you know that your numbers are correct, you can get accurate data whenever needed, and you are prepared for major events. If you need to get a loan, you have all of the financial data ready to go. When it is tax time you can hand over your clean books to your accountant knowing that everything is accurate and ready to go. As you plan your business you can use your financial data knowing that it is accurate and therefore highly useful.
How Do You Get Great Bookkeeping?
First off, there are very few business owners that I know that should be doing their own bookkeeping. So if you shouldn’t be doing your bookkeeping, how do you find someone to help? While there are many bookkeepers out there, not everyone may be a good fit for you. A good bookkeeper with talk with you about what you need as a business owner and what will help your business. They can provide examples of what they do on a weekly, monthly, and quarterly basis. They should know best accounting software use for your business and the best ways to automate any parts of your bookkeeping that can be. They should also be able to provide references. There are more questions to ask depending on your specific business, but those are just a few to look for to get you started.