As an entrepreneur, it only makes sense for you to keep one eye on your business, and the other on situations that could cause trouble for your company. While there are many reasons why small businesses fail - or turn less than the healthy profit they deserve - research suggests that one of the main culprits is poor accounting.
Whether it’s bad numbers, or no numbers, flying blind is a recipe for entrepreneurial disaster. If you want to increase your chances of long-term success, here are ten signs your company should be investing in professional bookkeeping services as soon as possible.
1. You’ve never kept a set of books before
As someone who’s capable of initiating a business from scratch, it’s no surprise that most entrepreneurs prefer to do things for themselves. Sometimes it’s just in their nature, but often it’s an attempt to save money. If you’ve never performed bookkeeping duties before, this isn’t the time to start. Trying to learn a complex new skill, while also juggling the many tasks involved in forging a new enterprise, will end up costing you more than it saves.
2. You believe bookkeeping software is a substitute for experience
The widespread availability of intuitive software like QuickBooks can be a double-edged sword. As with any other skill, the right tools can make your small business bookkeeping convenient and streamlined. But no tool is a replacement for knowledge and expertise. Without a full understanding of the intricacies of accounting, you run the risk of miscalculating and misrepresenting your books if you rely on software alone.
3. Your company lacks organization
How organized is your business? The state of your company’s finances contributes directly to the efficiency and performance of its infrastructure at every level. You can’t successfully control or navigate a business whose accounts are left to manage themselves. A solidly administered accounting foundation is key to improving productivity, and making future growth possible.
4. Your bills sometimes, or always, get paid late
When you lack the time or knowledge necessary to keep your accounts up to date, bills can fall through the cracks, and the money to pay them can be unavailable when you need it. Proper accounting practices include proper management and timing. When you take advantage of professional bookkeeping services, you’ll never have to worry about late fees, missing capital, or the repercussions of poor credit.
5. Your customer payments aren’t collected regularly
It can be difficult to stay on top of your bills when your customer payment collections are inefficient. Positive cash flow is all about balancing the money coming into your business, with the money going out. Seeking the right help to set up a well-organized bookkeeping system is crucial for keeping this balance intact - and for ensuring you have the funds to meet both your company’s overhead expenses and plans for expansion.
6. Your bookkeeping records are incomplete or nonexistent
Record-keeping is a vital part of every organization’s bookkeeping activities. Without generating and maintaining suitable account records, you risk incurring higher costs in both time and money. Hiring a qualified bookkeeping firm will streamline your financial documentation. It will also help you to avoid missed deadlines for government remittances, and non-compliance penalties for incorrect – or incomplete – tax returns.
7. You’re uncertain of which employee deductions to make
Payroll can be a complicated and stressful undertaking, especially since your company is legally bound to pay its employees correctly and on time, every time. Payroll calculations change on a regular basis. One of the biggest benefits of outsourcing your bookkeeping services, is the opportunity it provides to relegate the burden of staying current on employee tax and deduction rules, to an outside professional.
8. You’re unsure of how to take advantage of all the tax deductions available to you
Without the services of a bookkeeping expert, you may be missing out on tax credits and deductions your business is entitled to claim. Many companies find that this point alone more than pays for the expense of hiring a bookkeeping firm to handle their financial affairs. While you may not have the time or resources to keep up with the regularly evolving tax scene, your professional bookkeeper does.
9. You never have time to grow your business
Even if bookkeeping comes easily to you, every hour you spend managing your financial accounts is an hour you could be spending developing new business opportunities, or advancing your company’s services, products, and client relations. Hiring out your bookkeeping services can free up the time and mental clarity you need to focus on what you do best – running your company.
10. You’re not making as much money as you could be
Here’s the bottom line: if you want to increase your revenues, enlist the aid of a reputable bookkeeping service. This single decision has the potential to significantly boost your profits by increasing your company’s efficiency and productivity, decreasing the costs associated with late fees, interest charges, and missed tax benefits, and providing the time your entrepreneurial spirit needs to strategize, negotiate, and ultimately generate a higher level of income.