Are you a business owner? Have you been trying to manage the financial and tax aspects on your own? Do you believe that you can save money by avoiding hiring bookkeeping services?
The Small Business Administration reports that 30% of new companies go out of business in the first 2 years. The report further states that 50% make it to 5 years and 66% to 10 years. Only 25% survive longer than 15 years.
Owning a business requires many resources. Keep reading to learn how bookkeeping services can benefit your organization.
Reasons to Hire Bookkeeping Services
When building a business, the inevitable question becomes, should you manage the finances? The following describes what a bookkeeping service can offer for your company. Think about these tasks when wrestling with this question.
Allows You to Focus on Key Business Processes
During the startup phase, you need to focus on developing your product or service. You must spend time creating business plans, strategies, marketing, and funding streams. If these tasks aren’t met, you may jeopardize the company’s future.
Avoid Trying to Manage Financial and Tax Matters Outside Your Expertise
Most business owners don’t have a background in finance or business taxes. When asked about “accounts payable” and “accounts receivable” you may feel lost. The state and federal tax laws are rigid and don’t “give you a break” because you are new.
If you make mistakes in managing the finances, you may face monetary penalties. Many owners pay extra by misunderstanding how to report income, expenses, and deductions. This can risk your business credit.
Don’t Let the Business Take Over Your Life
Becoming a business owner is very time-consuming. It’s important to maintain a balance in work and personal life. This helps keep you healthy and decreases burn out.
Thus, spend your time exercising your expertise. Allow financial experts to manage that part of the business. This can decrease your stress about whether you are following all the finance and tax rules.
Receive an Outside View of the Business’s Progress
A bookkeeping service will track the flow of income and expenses. They can provide reports that show your business’s progress. This allows you to continually fine-tune your business plan and stay on the road to success.
Ensure All Bills Are Paid on Time
The bookkeeping service can handle paying all your business bills and payroll. This means one less thing for you to keep up with. It also prevents late charges and maintains good financial standing.
Taxes Are Extremely Confusing
Without specific training in tax preparation, filing taxes can be overwhelming. Should you be filing taxes annually or quarterly? Do you understand how to calculate expenses and deductions?
Do you know whether you should deduct large expenses or file depreciation? How do you provide employees with 1099s or a W-2? Having a bookkeeping service takes the burden off you.
Ensure You Are Receiving Payments
Running and building a business takes a lot of energy. You may have trouble keeping up with outstanding payments and late fees. The last thing you want is to give away products or services for free.
The bookkeeper will stay on top of who owes you money. They will calculate and collect late fees as needed. This optimizes your cash flow.
How to Evaluate Bookkeeping Services’ Expertise
It’s vital to hire a bookkeeper that you trust. You are placing your financial future in their hands. So, do your homework before deciding who to hire.
Look for the following qualifications.
A Certified Public Accountant (CPA) has completed at least an undergraduate degree. They must then satisfy the requirements for the state and pass the Uniform CPA examination. This deems them an expert in accounting and tax preparation.
A Certified Management Accountant (CMA) provides daily accounting management. A CMA must pass an examination and have business experience. Both CPAs and CMAs must complete continuing education.
Some CPAs may also become Accredited in Business Valuation (ABV) or a Certified Valuation Analyst (CVA). There are more specializations including a Personal Financial Specialist (PFS).
It’s beneficial to find a financial expert with knowledge of your industry. Are you for-profit or nonprofit? Do you partner with other businesses?
Many of these nuances require variation in your financial management. Having an industry expert helps ensure that all issues are handled correctly. This can also improve your return on investment.
Size of Your Business
Businesses range from sole proprietorships to multi-national corporations. This creates a need for very different financial portfolio management. Look for a financial manager with experience in working with companies in your size range.
Decide What Level of Service You Want
Companies use bookkeeping services in different fashions. You may wish to only hire a financial expert to prepare your tax return. They can create end-of-year financial statements as well.
You may want tax and financial planning help for the business and/or retirement. Some companies wish to have the bookkeeper handle all billing, payroll, and collections. They may rely heavily on monthly financial statements to guide their business decisions.
Do They Tailor Services to Your Needs?
One key question to ask is if they tailor their services to meet your needs. You want to find a service that will learn about your unique business. They must consider your goals, processes, and budget.
They need help in organizing and preparing for the future. You will want to feel comfortable trusting their guidance. They should bring insightful solutions that meet your business’s unique requirements.
Advantages of Using Professional Bookkeepers
Money is often tight when you start a business. You may feel like it’s better to save the money and handle the finances yourself. In fact, a professional bookkeeper saves money over time.
As experts, they ensure that you take full advantage of all deductions. You receive guidance to optimize investments. You experience fewer missed payments, tax due dates, and delayed income.
Would a Bookkeeping Service Benefit Your Company?
This article has discussed ways that bookkeeping services can provide financial benefits for your business. Fourlane offers QuickBooks Solutions for thousands of clients. We help them meet their financial and ERP system challenges.
We bring both industry and product experts in accounting to the table. Our focus lies in making sure that our clients buy relevant software at the best prices. Contact us today to ask questions and get a free custom quote for our bookkeeping services.