Contrary to popular belief, hiring a bookkeeper can be a big advantage and take a huge weight off your shoulder. However, many small and large businesses still do their books themselves, believing that bookkeeping is an additional cost to the company.
A decent bookkeeper can help you with several things, including smoothing cashflow, identifying last payments, finalizing your accounts, etc. Before we begin, let us debunk some myths surrounding bookkeeping and then discuss the advantages of having one for your business.
Do You Need a Bookkeeper to Start a Business?
If you have just started a business, then you may wonder if you would want to hire a bookkeeper or do it all by yourself. Doing all the math and ensuring that your business complies with the statutory laws can be a tedious and frustrating task. So while you can start your business without a bookkeeper, you should really be considering all the benefits of hiring a bookkeeper for your business.
Some of the benefits of having a finance professional are:
-> Ensure that you are growing smart and in the right way.
-> make sure that your tax payments are accurate.
-> Paint the bigger picture by showing the growth path to your business
Does Every Business Need a Bookkeeper?
Business owners like to handle their own finances for several reasons, including the fear of giving private financial information to third parties. However, doing books yourself in a start-up is still manageable, while it gets extremely difficult as your business grows.
Accounting and finances are the backbone of your business, and you should have a skilled person to do it for you if you want to further expand your organization.
How Can Bookkeepers Help Small Businesses?
According to the US Small Business Administration, 50% of new small businesses fail within five years of starting, and the main reason for that is financial mismanagement.
There are several reasons why small businesses need bookkeeping, including:
-> Filing and paying your taxes
-> Keeping a record of the amount payable and receivables
-> Easy reconciliation of your bank accounts
-> Gauge if you are making profit or not
Now that we have debunked the myths of having a bookkeeper, let’s look at the top 10 benefits of having one for your business
1. Focus On Your Business Strategy
Having a bookkeeper for your business helps you focus on your growth strategy as it takes care of tracking the minutest details and insert it into the accounts software.
The task of tracking intricate financial details such as expenses, invoices, and receipts is taken care of by them. This frees up your time and mental energy to concentrate on developing and growing your business.
2. Decrease Accounting Costs
A bookkeeper can help you decrease your accounting cost by managing daily transactions and running monthly payroll.
They handle tasks such as recording transactions, reconciling accounts, and preparing financial statements, which would otherwise require extensive time and resources if done internally by an employee.
3. Keep An Eye On The Cashflow
Bookkeepers provide the second set of eyes to oversee your cashflow and warn you when you run low on money. They ensure that there is a continuous flow of cash in your organization.
They diligently monitor incoming and outgoing funds, identify potential cash shortages or surpluses and provide timely alerts and recommendations. This proactive approach helps the business maintain a healthy cash flow, so they can meet financial obligations and seize growth opportunities.
4. Provide Key Figures Quickly
Get quick and almost instant access to your monthly business reconciliation and reporting by hiring a bookkeeper. They can also quickly provide you mid-month information if you need it.
Bookkeepers generate monthly reconciliations, income statements, balance sheets, and other key figures promptly. This empowers the business owners with crucial insights for informed decision-making, strategic planning, and effective communication with stakeholders.
5.Provide Unbiased Guidance
Bookkeepers are the right professionals to guide you through your balance sheet, statement of cashflow and income statement and tell you what they exactly indicate.
Professional bookkeepers offer unbiased guidance and explain the implications of key financial figures, ratios, and trends. This knowledge empowers business owners to make sound financial decisions, identify areas for improvement and capitalize on growth opportunities.
6. Helps You Take Quicker Decisions
With proper professional guidance from a bookkeeper, you can make more informed and quicker business decisions as you will have all the financial details and insights reported accurately.
7. Gives Total Control Of Financial Data
With a quality accounting software in place, a bookkeeper can work on the data available in the software to manage your business’ financials more effectively.
8. Decreases Tax Liabilities
A bookkeeper with experience in your specific industry can provide you with information on tax-deductible expenses. This way you know where you can save taxes and reduce your tax liabilities.
By maximizing the eligible deductions, businesses can minimize their tax liabilities, optimize their financial position and potentially generate savings that can be reinvested for the growth of the business.
9. Tracks Daily Transactions
A professional bookkeeper’s bread and butter are to manage and record day-to-day bank transactions. If you are already using accounting software, your bookkeeper can feed your bank statement into the software to monitor cashflow and save time on manual data entry.
A proficient bookkeeper diligently records and categorizes daily transactions, including sales, purchases, and daily expenses. Accuracy in their work ensures precise and complete financial records and leaves a clear audit trail.
10. Helps Run Businesses Smoothly
Bookkeepers are not just for large companies. Like mentioned before, they are vital for running both large and small businesses smoothly. Inaccurate bookkeeping can result in massive loss of money and hefty penalties from the regulatory bodies. By maintaining accurate financial records, adhering to regulatory standards, and preparing well-structured reports, a professionally hired bookkeeper contributes to the smooth operation of a business. This in stills confidence in stakeholders, facilitates financial transparency, and helps prevent costly errors or penalties that could otherwise disrupt business operations.
Hire the Right Person for Your Books!
A bookkeeper is vital for organizations and helps them manage their financials effectively. They also provide insights and recommendations on the financial health of your company, thereby helping you make faster decisions.
It is a wise decision to hire a bookkeeper if you want to save time and money and further expand your business.
