Cash flow (or lack of it), is cited by the Small Business Administration as the number 1 reason why 82% of small businesses close. If you want to have a business that lasts, you need to manage your finances and your cash flow.
You may not have the time or the knowledge to do all of your bookkeeping. Bookkeeping services for small business can be helpful to you to manage your business finances.
Read on to learn what bookkeeping services can do for your business and how you can find the right bookkeeper.
1. Daily Account Management
You may have a system in place where you enter your expenses and manage your accounts once a week. That’s not a bad system, but it can be inaccurate if you’re trying to get a handle on your finances in between those times.
A bookkeeper enters and tracks the income and expenses of your business every day. That ensures that anytime a report is pulled, it’s an accurate reflection of the business at that moment.
2. Set Up QuickBooks
More small businesses use QuickBooks as their accounting system than any other system out there. It’s a very robust accounting system that’s been around for years, which is why businesses use it.
It can be a challenge to set up, though. You have to create a chart of accounts for your business, which categorizes your expenses. You also have to connect your bank accounts.
These steps are necessary, but they do take time. Handing those things off to a bookkeeper allows you to focus on other projects.
3. Payroll
Out of all of the financial tasks business owners do, payroll takes up the most time. This is the area where business owners make costly errors as well.
You can work with a bookkeeper to make sure that your employees get paid on time, and the right amount of payroll taxes are paid.
4. Get Your Business Ready for Tax Season
What do bookkeepers do and how does that differ from accountants? A bookkeeper focuses more on the day-to-day transactions and reporting in the company. An accountant will take what the bookkeeper does and create tax reports and other detailed financial documents.
When you hire bookkeeping services, you no longer need to hand your accountant a box of receipts to figure out. The bookkeeper will have everything ready for your accountant, making tax season much easier.
5. Bookkeeping Services and Time
You can’t look at bookkeeping services as another business expense. It’s a mistake to do that because you’re missing the value of your bookkeeper. That’s the value of time.
How much time will you save by not doing payroll, invoicing, and other bookkeeping activities?
How much is your time worth per hour? Now consider what revenue-generating activities you can do with your free time.
Once you do the math, you’ll find that a bookkeeper is well-worth the expense.
6. Financial Reporting
You need to have financial reports such as your profit and loss statements, income, and expense reports to review each month. You can also create reports that compare profit and loss statements from the previous month or year. These can be generated by a bookkeeper.
7. Make Better Decisions
It’s a mistake to make financial decisions without a complete and accurate set of reports. You can project what your income and expenses will be and make financial decisions accordingly.
For example, if you have cash on hand and revenue is strong, you can leverage that cash to invest in equipment for your business. That can help your business grow.
8. Handle Accounts Payable and Receivable
How often have you had to contact clients to pay invoices? It can be a challenge for you to do so because you want clients to pay, but you don’t want to lose the client’s business.
A bookkeeper can be used to follow-up with those invoices and preserve those important relationships.
They can also send out invoices on a regular schedule, which makes it easier for clients to pay on a consistent basis. That, in turn, creates a steadier cash flow for your business.
Bookkeeping services also handle the payment of invoices, so you’re not assessed late fees or other penalties because you didn’t get around to paying an invoice on time.
Hiring Bookkeeping Services for Small Business
Do you see the advantages that bookkeeping services bring to your business? Here’s how you can find the right bookkeeper for your business.
Types of Bookkeepers
As you start your search for a bookkeeper, you’ll soon find that there are a lot of them. There are local bookkeeping services, online bookkeeping services, and bookkeepers that specialize in a specific industry.
You want to consider the types of bookkeepers because you’ll find that there are advantages of certain types because of your unique situation. For example, an e-commerce business with clients all over may benefit from an online bookkeeper.
Licenses and Expertise
You have to consider the qualifications of a bookkeeper. Many bookkeepers will have a certification or a two-year degree. That’s not a requirement, though.
You want to hire a bookkeeper that has a lot of experience. A new bookkeeper with little training may struggle with tasks or make mistakes with your books.
Types of Services Offered
Bookkeepers offer many different types of services. Some bookkeepers only do day-to-day data entry, while others give a full slate of services. There are bookkeepers that will offer financial insights to help your business grow.
You need to assess what your business needs are and choose the right bookkeeper that matches those needs.
Bookkeeping Services Make a Difference In Your Business
Small business owners have enough work to do. You simply can’t afford to spend more time on bookkeeping tasks when you can hand them off to a bookkeeper to manage.
Bookkeeping services for small business keep your finances organized and save you time that you can invest elsewhere in your business.
Are you ready for more business and financial insights? Take a look at our Finance page to find other tips you can use to improve your business bookkeeping and accounting on a frugal budget.
