Starting off, you might be tempted to do all business processes yourself. From marketing to finance, all work seems manageable, and the passion for creating a well-rounded business helps you work past the hours you would normally dedicate to work.
However, as time passes and your business grows, you might find it challenging to keep track of all the work you’ve taken charge of. The first place that could take a drastic hit is your finances.
Your business finances are something you should not skimp on. By hiring bookkeeping services, even though it seems to increase your costs, you are actually saving in the long run and providing yourself with peace of mind.
Everyone likes to handle the critical areas of their business on their own, especially with financial management and record-keeping. Sometimes these responsibilities take up so much of your time that it gets the best of you. Fortunately, you can transfer all that stress to someone who offers bookkeeping services and focus on growing your business or take some time off.
Having proper financial records is essential as it gives a clear picture of your business expenditures, income, taxes, and profits among many others. Listed below are the signs that your business needs accounting services.
1. Your Books Aren’t Updated Regularly
Do you have the impression that your books are constantly outdated and that you are constantly trying to do everything on time but you are failing? If this happens often it is a clear sign that you need professional bookkeeping services. The volume of work could be so great that you do not have the time to regularly update books and then you never know the real financial situation.
You might think you have more or less money than is actually true and this will lead you to many wrong business decisions. You will spend more than you can or you’ll think you don’t have enough money to invest, while in fact you just don’t have a firm grip over your finances.
Keeping track of your bookkeeping is a regular job and not something you should leave until the very last moment. If you open your books to find heaps of untracked receipts and payments, then you’re in hot water!
Do you have a backlog of paperwork, with a shoebox of untracked receipts, payments you haven’t reconciled and unassigned income and expenses? While tackling anything “accounting” may feel daunting and cause resistance to managing your books, chances are there are also other reasons for having outdated books.
The problem with outdated books is that you never really have a firm handle on your finances. Tracking and managing your cash flow becomes difficult. It’s even harder to gauge the financial health of your business.
A bookkeeper helps rectify this situation by recording daily transactions and creating reports to help you better understand your financial situation.
2. Your Business is Growing Rapidly
Every business owner dreams of expanding and increasing their revenue. But while making more money and growing the business is great, it also means hiring more staff, serving more clients, partnering with additional suppliers, and purchasing more equipment and inventory. This all translates into a lot more numbers to juggle, which can quickly become too much to handle.
As you take on more personnel and sub-contractors, your business also becomes subject to additional regulations. Adding a bookkeeping service makes it easier to ensure that your business stays compliant with the current laws. Professional bookkeepers are up-to-date with regulations affecting businesses and can keep you informed of your obligations.
It could be that your business growth trajectory has been on the rise and thus you have been opening new branches and units over time. When your business is expanding rapidly, it is advisable that you get the services of an accountant who would help you in keeping books of account to ensure that the business runs at a profit, advise on ways to mitigate risk and increase the bottom-line while undergoing expansion.
Even if one owns a small business, bookkeeping services are an essential part of that business. One may feel that it is not all that important, but if you think this way, you’re probably making this common mistake.
3. You Lack The Time
An expanding organization means a lot more clients, high-billing volumes and also more back-office documentation. And this to-do list only gets longer as your business keeps growing.
If you barely have the time to focus on bookkeeping, that’s a clear sign that you need to hire someone to do it for you. Otherwise, you risk having more errors in your books than you can take care of, which, of course, can affect other aspects of your business. Don’t feel guilty for not being to do everything because in the end, your small business cannot go on as a one-man show for long.
If you can’t find time in the day to get everything done, prioritize and focus on what’s important for your business. You may discover that outsourcing tasks like bookkeeping frees up time to finish all your work.
Just like you might not notice that your business is growing so fast, you might not realize the increasing amount of responsibilities you have taken on until it’s too late. While you might have been able to handle everything on your own in the early days, there comes a time when outsourcing bookkeeping and accounting can help take the stress off of you significantly.
4. Your Bookkeeping Skills Aren’t Great
You may be an expert at what you do—whether that’s designing websites, writing copy or taking beautiful photographs. But, you cannot be an expert at everything.
If math and economics have never been subjects you took in school, then you should find an accountant right at the start. Even for initial bookkeeping, you need a certain skill and good handling of numbers. If you know that this is not your strong suit, leave it to the professionals, and you stick to what you are talented for. Hiring small business bookkeeping & accounting services will save you time so that you can focus on other productive areas of your business.
5. Cash Flow Issues
When you run low on cash, you cannot cover your expenses for specific months. Many factors can lead to such a scenario, but high unforeseen costs and late payments from clients can contribute significantly. A bookkeeper will help you track your expenses and make follow-ups on overdue invoices. You, therefore, will be able to know how money is flowing in and out of business.
Bookkeepers track your accounts payable and accounts receivable and follow up on overdue invoices, so you’re on top of cash flow at all times.
6. You’re Unsure Whether You’re Making a Profit
You know you need someone to do accounting for your small business when you can’t determine your financial numbers. As such, you are not sure whether you are making a profit. You do not know your expenditure requirements compared to the income you generate. A bookkeeper will track all your business transactions and be able to determine your financial position at the end of the year.
7. Your Customers Owe You Money
Many small businesses face this struggle: chasing down customers who are late paying off their invoices. Many clients will postpone payments because they have a shortage of available cash, or sometimes they just aren’t keeping up with their financial obligations.
Like most business owners, you simply do not have the time to run around and keep tabs on who’s paid and who hasn’t. Not only that, but it’s a good idea to separate customer relations and debt collection. This not only helps save you time and effort, it also helps keep your relationship with your clients on a positive note while you leave the invoicing and payments to a separate department.
A bookkeeper will make sure that your clients are paying on time so that you don’t run short on cash.
8. You Only Look at Your Books When it’s Time to Pay Tax
This is not in your focus all the time, only when it comes time to pay taxes, then you remember that you have to do everything about it. Then the work that awaits you is absolutely overwhelming and it is very likely that you will not do it the right way and that you will make mistakes.
Even if you do everything right, it will take you days to get the books in order.
9. You’re Tired of Doing it Yourself
You feel like every day, all day, you just work and don’t have time for your family and friends. It is something that will surely happen to you at some point when you have your own business, but it must not become your everyday life. If that happens, your health will suffer, but your commitment to work will also decline over time.
Nothing takes a toll on one’s health more than running a business. For small business owners and entrepreneurs who hold multiple responsibilities, the stress is too high. That’s the reason managing financial documents always comes last on the to-do list; in fact, it should be one of the most important areas that any business should take very seriously.
Managing a small business is not that easy. It involves lots of stress and hard work. If you try to handle too many things, then it will hurt your health as well as divert your focus from the core business functions.
Bookkeeping & Accounting for your business is essential as it provides in-depth information on your overall business financial health and ensures you avoid any potential penalties. We at BookRobo have years of professional experience and an expert team of accountants. Get in touch with us to find out how we can help you.