Getting your financials in order is a very challenging part of running a business. Keeping track of payables and receivables, payroll and day to day banking is essential to running a successful business. But as most business owners have found, it is difficult to get done properly.
Proper bookkeeping allows your business to easily keep all financials up-to-date so you can better manage your business. Many business owners attempt and fail at doing their own bookkeeping. Constantly keeping track of financials and managing a business are two jobs that overlap and cannot simply be multi tasked. That’s where hiring a bookkeeper comes in.
Hiring a bookkeeper can be costly, especially when you have a full time in-house employee. Many smaller businesses cannot afford to have a bookkeeper full-time or even part-time, not to mention an office or work space for them. Outsourced bookkeeping is the answer, unfortunately, most business owners are not aware this form of bookkeeping exists and that it is far less expensive than in-house bookkeepers
There are a lot of options when it come to payroll. The most obvious is having a payroll company process it for you. This is a great option especially if you have a larger number of employees, the downside is that it is costly. Generally you pay a processing fee per pay period and a per check fee on top of that. They will also file and pay your payroll taxes.
The lesser known option is that you can do it in house. This means you can purchase your own payroll processing software and process yourself. Downside is you will have to make sure you file all the payroll taxes yourself and on time to avoid serious penalties. Good news, your bookkeeper can handle this for you
A bookkeeper is mainly responsible for the day to day financial transactions and recording of them. Processing payroll, tracking income and expenses, and monthly bank reconciliations. Of course, this is only a short list, responsibilities vary depending on the business.
An accountant however, is responsible for interpreting and using the day to day financial transactions recorded by the bookkeeper to file year end taxes. It will also fall on the accountant to make sure that the bookkeeper is recording transactions appropriately for the client.
Bottom line... You need BOTH!
You certainly can! That's the short answer. Some companies do choose to have their accountant process all their day to day transactions, this will cost you though. Accountants charge anywhere between $150-$250/hour and sometimes more. Bookkeepers charge between $50-$100/hour, and will work directly with your accountant to make sure you are covered.
1. You've never kept a set of books before, and quite frankly you really don't know how. Learning how to do your books is going to be time consuming and take away from focusing on your business.
2. You are paying your bills late if at all. It happens to us all from time to time, but if you are habitually late and forgetting altogether then you need help! Not only can late fees and penalties hit the check book but they could affect your odds of getting credit for your business.
3. You are paying your bills late if at all. It happens to us all from time to time, but if you are habitually late and forgetting altogether then you need help! Not only can late fees and penalties hit the check book but they could affect your odds of getting credit for your business.
4. You’re unsure of how to take advantage of all the tax deductions available to you. You could 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.
5. You’re not making as much money as you could be. Hiring a bookkeeper 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, ultimately generating a higher level of income for you and your business.