If you own a small businesses, you know the unique set of challenges and opportunities you face. Managing finances effectively is crucial for success, yet many small business owners find it tough to juggle this task along with their daily operations. While large companies often have entire accounting departments, small businesses are usually left to handle bookkeeping and financial reporting on their own. This article covers why hiring a professional bookkeeper is a game-changer for small businesses, when it's time to bring in expert help, the advantages they offer, and how they can save you both time and money. Whether you're just starting out or looking to streamline your operations, understanding the importance of professional bookkeeping can help your business thrive and grow.
For small business owners, managing finances and reporting is equally crucial but often comes with fewer resources. While the idea of an in-house accounting department is appealing, it may not be economically feasible. Instead, small business owners often find themselves acting as bookkeepers and tax preparers. This temporary solution, however, is not sustainable in the long run. The demands of running a business can quickly become overwhelming when financial management is added to the list of responsibilities.
Many small business owners start their ventures focused on producing the best products or services, with bookkeeping often being an afterthought. They may opt for SaaS solutions like Xero, FreshBooks, or QuickBooks Online, intending to manage their daily transactions. However, without a background in accounting, they can struggle or even fail despite their good intentions.
It's estimated that the average small business owner spends 10 hours a week on bookkeeping tasks. This is time taken away from growing the business and generating revenue. Before deciding to handle bookkeeping on your own, consider these crucial questions:
Do I have the skills necessary to establish a bookkeeping system?
Do I have the time to maintain this system?
Is my time best spent managing bookkeeping tasks?
Can I stay updated on tax laws to avoid legal issues?
If you answered ‘no’ or ‘not sure’ to these questions, it might be wise to hire a professional bookkeeper from the start. An expert can ensure that your financial records are accurate and up-to-date, which is essential for making informed business decisions.
A professional bookkeeper brings several benefits beyond just managing transactions. They can provide valuable insights into your business’s financial health, helping you identify trends, forecast future performance, and make strategic decisions. Moreover, they can help streamline your financial processes, reducing errors and ensuring compliance with tax laws and regulations. This can prevent costly mistakes and penalties that can arise from mismanagement or oversight.
In-house bookkeepers and accountants can be significantly more expensive than outsourced bookkeepers. An in-house bookkeeper typically commands a salary of around $60,000 per year, plus payroll taxes and benefits. For many small business owners, this cost is prohibitive. In contrast, an outsourced bookkeeper usually costs about one-third of this amount without the additional payroll taxes and benefits.
A qualified outsourced bookkeeper brings expertise to your business, ensuring your finances are managed by someone knowledgeable about current tax laws and regulations. This partnership allows you to focus on running your business while your bookkeeper handles the financial details, ultimately saving you time and money.
Additionally, outsourcing your bookkeeping can provide flexibility. You can scale services up or down based on your business’s needs without the constraints of hiring and training new staff. This adaptability is particularly valuable for small businesses experiencing growth or seasonal fluctuations.
Are you ready to outsource your bookkeeping? Let Accounting Prose take this task off your plate so you can concentrate on what will propel your company forward. We look forward to serving you and helping your business thrive. Our team of expert bookkeepers is dedicated to providing personalized, efficient, and reliable financial management services tailored to meet the unique needs of your business.