Do you
think bookkeeping is your least exciting part about running a business? You are
not the only one! Half of the business owners admitted that keeping finances on
track and maintaining accounting books is the most complicated and
time-consuming task. Therefore, many businesses prefer to hire bookkeeping outsourcing services to manage finances and relevant records efficiently.
Check
out the top signs to decide when you should hire bookkeeping services suggested by industry experts:
Scott Hasting, Co-Founder | BetWorthy LLC
IRS audit: If you're beginning to find that your documents don't match, such as making errors when filing your business taxes. Such mistakes can result in an audit since they use statistical formulas to find discrepancies in tax filings. If you're making small errors such as this, they may have greater consequences, so it's best to outsource your bookkeeping rather than risk further investigation from the IRS.
Also Read: How Does Outsourcing Tax Preparation Help Improve Client Service?
You're
finding it difficult to locate files: A successful business is an organized one, and if you're
having a hard time looking for certain documents with a rising frequency of
mismanagement, you may need to start looking for bookkeeping services. A
business must track all of its cash flows in order to make accurate forecasts
about the future and effectively make decisions. Finding it difficult to locate
documents can also give off an unprofessional image, which can make customers
lose faith in your business's security.
Your
business is growing, and it's hard to keep up: The requirements of business change as it expands. The
larger your business grows, the harder it will be to keep track of all your
related documents and cashflows. As a result, it can diminish the time you'll
have to spend on the core components of your business. As your business expands,
you'll also find more funds available, which you can use to outsource your
bookkeeping.
Alex Manos, CEO at Beverlyhillscarclub
The warning sign for me was when I started doing bookkeeping at night. When my sole accountant was too busy or on vacation, I didn't want to bring my business's financial operations to a standstill. As a result, I took over and did bookkeeping myself. So I found myself answering emails, preparing, and sending invoices at one in the morning. As a business owner, I surely have better things to do with my time. Some of these things, like strategic planning and leadership functions, cannot be easily delegated. But bookkeeping can.
Tyler
Forte, the founder & CEO at Felix Homes
Hiring
a bookkeeper was one of the best decisions I made in 2020. You know it's time
to hire a bookkeeper when you cannot confidently say how much revenue and
expenses you had the previous month. After all, running an unprofitable
business is the quickest way to not running a business. By hiring a bookkeeper
who's responsibility is to monitor and report the financial health, you do your
business a great service. You don't have to look at the bookkeeper as a large
cost either. In 2020, our bookkeeper was able to find recurring payments on our
business credit cards that, in all honesty, I probably would not have caught. I
can confidently say that a good bookkeeper will save you more money than they
cost.
Ruaan Nel, Co-Founder of Electric Biking
The one warning sign that made me choose to outsource my bookkeeping was that I spent too much time doing that myself, I was not as productive on my main job, which is SEO, and I was losing too much time and energy on something that I could just hire a professional to do. Placing my financial books in the hands of a professional bookkeeper who knows the best practices and strategies saved me so much time and money, and I can perform my job more efficiently and effortlessly.
Ben Simon, Marketing Manager at Finesseliterarypress
It is fine to do bookkeeping for your business as far as you don’t compromise your prime hours. Once you have to dedicate your exploring and reaching out to potential clients’ time to bookkeeping, that’s when it becomes an issue. Once your business is on such a stage that you have to work late to keep track of your day to day business activities, that is a clear indication when one must outsource their bookkeeping. Free time is significant to relax and rewind; thus, one should never compromise on that.
Tim Clarke, Director of Sales @ SEOBlog
Speaking from personal experience, I'd say that the most obvious sign that taught me I needed an outsourced bookkeeper is when I noticed I was mixing my personal and business finances. Using personal money to cover a business expense and not being able to track earnings and losses. I realized my accounting system is also outdated, and I was already behind paperwork that leads me to work more than the usual working hours. Few more signs would be not being able to track customers' payments and lack of understanding of state and local taxes, IRS requirements, tax calculations, and adding too much accounting time instead of business scaling.
Conclusion:
Considering
the experiences and opinions shared by different business owners and experts, taking advantage of bookkeeping service provider is an excellent opportunity to deal with staff shortage,
operational complications, process inefficiency, and slow growth. Besides,
outsourcing can be your next best solution if you plan to scale up operations,
services, or business.
