I see small businesses struggle every day with getting their bookkeeping done. Common reasons include lack of time, lack of motivation, lack or experience and lack of desire. For one reason or another small business bookkeeping gets the back burner. I have found that the real reasons business owners let their bookkeeping slide is because they are intimidated by it, they don't have the knowledge to do it themselves or they don't want to spend money. Somehow the bookkeeping always gets done or at least the taxes do. When a small business owner is shown how a good bookkeeping system can help grow their business, their attitude totally changes. Here are three options to finally get your bookkeeping done correctly and keep it updated regularly.
Many small business owners try a do it yourself bookkeeping approach when they first start out in business. I would imagine most business owners attempt to handle their own books to try and save money. However, handling your own books often ends up costing more in the long run. Unless you have a solid financial and accounting background you most likely are going to make some mistakes. Having your CPA do elementary bookkeeping work to fix your mistakes at tax time is costly. One thing you can do to help yourself is to get a one-time bookkeeping consultation to get the system set up properly and to learn QuickBooks and bookkeeping basics. Also, make sure to code any transactions to the QuickBooks ask my accountant account to flag them for review.
Pros: Cheap and you may learn something.
Cons: You will probably make mistakes that are costly to fix. Won't be as efficient as having professional help.
Another option I think you should consider when trying to get your bookkeeping done is to tag team it with a professional. Find a bookkeeper that can offer you QuickBooks and bookkeeping training and support. If you set up an initial bookkeeping consultation you should get a good overview of QuickBooks and bookkeeping. If you pay a bookkeeper to walk you through a month or two of properly handling the books you should be able to attack the bookkeeping on your own. I would then use your bookkeeper on an as needed basis to get your questions answered. This is a great way to learn QuickBooks and bookkeeping while getting your books done correctly. Additionally when you are ready to outsource your bookkeeping needs you will already have a great bookkeeper lined up.
Pros: Bookkeeping should be more accurate and you will learn QuickBooks and bookkeeping fundamentals.
Cons: Time spent doing bookkeeping instead of growing your business. Still may have some bookkeeping errors and inefficiencies.
Once you have grown your business enough it might make sense to outsource your bookkeeping. If you are like me you think a lot about opportunity cost. Do it yourselfers don't think about opportunity cost because they don't consider their time as costing them money. I see my time in the form of dollar signs. I only take on tasks if they make sense financially to do so, otherwise I outsource them. If you have grown your business to the point of considering outsourcing your bookkeeping then it may make sense so that you can continue to focus on growing your business. We never recommend that a business owner step out of the bookkeeping process completely. It will still be important to analyze your small business financial reporting.
Pros: You should have a real solid bookkeeping system that you can use to make business decisions. You can spend your time analyzing reports and growing your business rather than handling the day to day bookkeeping.
Cons: More costly and you may lose the financial intimacy that you had with your business finances when you were handling the books on your own.
Don't continue to push your small business bookkeeping down the priority list. Try one of the above methods and stay on top of your bookkeeping for good. Your bookkeeping should be a tool that you can use to make key business decisions, not a burden or a hassle.