This is a valid question; is your bookkeeping a waste of time and money? Why do you maintain a bookkeeping system? Is it because Uncle Sam says you need to? Is it because you want to? Is it because your bookkeeping system helps you run your business more efficiently? Here are some good questions to ask yourself and your current bookkeeper to see if your bookkeeping system needs an overhaul.
Does your bookkeeping system provide you with valuable information that helps you run your business?
If your bookkeeping system is not helping you run a more profitable business you may have a problem. Your bookkeeping system should be a valuable tool, not a hassle. If you are unable to extract any meaningful data from your bookkeeping system then you have a problem. You need to explain to your bookkeeper what type of information you want to be able to get from your bookkeeping and hold them accountable for providing you with that information.
Is your CPA happy with your current bookkeeping system?
Call your CPA and ask them about your bookkeeping system. Does the current bookkeeping system provide them with organized information that makes for an accurate and efficient tax return filing? If not find out how the bookkeeping could be done differently to make things easier on them, which should drive your CPA bills down.
Have you ever filed for a tax extension?
I typically upload my QuickBooks file to our CPA on January 1st each year. Why? Because I can, because I am anal, and because I am proud that I can do so. I can just see my accountant chuckling as he gets my email telling him that I am ready to go for taxes. If you are constantly filing for a tax extension then you are not on top of your bookkeeping. Also, a tax extension only extends the filing date not the due date. Therefore, if you file for an extension and end up owing taxes then you will owe late penalties and interest as well. If you are filing for tax extensions then you don't even know how your business is performing. Your business is running you, not the other way around.
Do you really need a full time bookkeeper?
Have you ever wondered if you need a bookkeeper for 40 hours per week? If you are a small business then chances are you do not need a full time bookkeeper and you may benefit from outsourced bookkeeping services. You will save money and lots of it.
Is your bookkeeper stealing from you?
Internal bookkeeping theft is on the rise and is becoming a real problem. If your bookkeeper is disgruntled, desperate, dishonest or all of the above then they may try and steal from you. Follow our guide to audit your bookkeeper to make sure they are not stealing from you.
Take a look at your bookkeeping system to make sure it is working for your business. Make sure you are not wasting time or money on your bookkeeping. If you find that your bookkeeping system is not living up to your needs then it may be time to figure out how to fix that problem.
