How do you rank bookkeeping on your priority list? Many small business owners see bookkeeping as another set of tasks to tack onto an already overflowing to-do list. Others may choose to ignore it altogether. However, small business bookkeeping tasks are some of the most important items on your to-do list – for both legal and organizational purposes.
If you don’t have the expertise, time, or desire to pay close attention to the financial ins-and-outs of your business, inquiring for assistance is crucial. In the following content, we discuss the importance of small business bookkeeping and the benefits associated with professional financial management.
Does My Small Business Need Bookkeeping?
In short, yes: all businesses do. Unfortunately, when bookkeeping is pushed to the wayside, corners are cut, mistakes are made, and important data is lost. A detailed, organized view of your business finances is critical to remain compliant with legal regulations, to provide an overview of your financial health at any given time, and to streamline inevitabilities (like audits and taxes).
Owning and running a successful business is an upward battle. You might have sizable capital or a steady stream of regular customers, but your business won’t thrive until you’ve mastered the necessary financial skills to be effective at bookkeeping.
If you cannot devote the necessary time or expertise to properly navigate small business bookkeeping, identifying an outsourced financial professional is the next step. Once you’ve found a trusted bookkeeper, you will experience the following benefits.
7 Small Business Bookkeeping Benefits
#1. Record Keeping
Bookkeeping is all about precision and detail. A professional bookkeeper knows how to keep updated records of the most important financial elements of business management, like income, expenses, and net profit. Updated financial statements are critical for day-to-day monitoring and for simple access when a statement is needed, such as for an audit.
Beyond business organization and management, bookkeeping is important for compliance. Legal regulations are complex and dynamic; professional bookkeepers are always up-to-date on the latest legal changes and compliance metrics. Furthermore, if any mistakes do occur, the bookkeeper will make necessary adjustments, saving your small business time and money.
#3. Financial Foresight
We cannot emphasize this statement enough: financial foresight is invaluable in numerous scenarios. We discuss four prominent components below.
A clear view of your finances at any given time will allow you to make informed business decisions.
- Do you have the resources available to pursue a major investment?
- Should you hire another full-time employee?
- Can your company afford to move to a larger space or upgrade equipment?
These simple yet impactful decisions should be made with the current financial scope of your business in mind – anything less could result in business failure.
Access to properly updated financial statements will allow you to project the outcome of tax season. Beyond helpful foresight, updated records eliminate the all-too-familiar scramble to collect necessary documents when the IRS requests financial statements.
Some business decisions can be considered for a while. Others require quick response times. When these circumstances arise, a clear understanding of your current financial status will allow you to decide if now is the right time to act.
Unfortunately, if you have business partners or employees, fraud is a possibility. A good, experienced professional bookkeeper will have the expertise to spot suspicious financial activity.
Additionally, updated financial records bear witness to fraudulent activity, should it be uncovered, serving as evidence. Every business is susceptible to fraud or embezzlement, and a clear grasp of finances is one of the best ways to prevent and uncover these crimes.
#4. Negotiation Tool
Banks and investors are inclined to trust businesses with a clear financial picture. Companies that are thriving – and have the records to prove it – may receive better loans from banks and heightened interest from investors.
#5. Stress-Free Audits
Did you gawk at this benefit? We understand! Many small business owners assume that “stress-free” and “audits” are mutually exclusive. However, they do not have to be. If you record financial data well, producing accurate, up-to-date statements is effortless.
When provided with the necessary documents, the auditor will quickly examine your detailed reports and statements, making the auditing process streamlined and efficient.
#6. Delegating According to Your Strengths
Few small business owners have the expertise to properly execute bookkeeping tasks – or enjoy the bookkeeping process. If you fall into this category, consider outsourcing bookkeeping tasks to a professional team and dedicating time to your strengths. This may be one of the best decisions you make for the long-term growth of your business.
Your small business may not remain “small” for long. As your organization continues to thrive and grow, scalability is an important consideration. Even if you are aptly handling your business’ bookkeeping tasks now, will you be able to manage once your business has doubled or tripled in size. Your responsibilities will continue to expand, and your finances will continue to grow in complexity.
Outsourcing tasks to a professional bookkeeper ensures a solid foundation upon which to grow, and a relationship built for days of future expansion when you can no longer handle every business responsibility.
What to Look for in an Outsourced Bookkeeper
Choosing to outsource your bookkeeping tasks is the first step, but it doesn’t end here! Choosing a trusted, reliable, and experienced financial professional is equally important. How should you select the right bookkeeper to manage your business’ finances?
- Firstly, look around. The very first outsourced bookkeeper you run into may not be the best fit for your business. Identify a variety of options, perform interviews, learn about areas of expertise, and then select the best fit for your business.
- Next, pay attention to reviews. Ask any business-owners in your sphere of influence about their bookkeeping references. Perhaps a peer is working with an excellent, highly-recommended, affordable bookkeeper. Alternatively, look online for Google and social reviews.
- Finally, ask about experience. The best outsourced bookkeeper for your business will have expertise in your industry. In your interviews, ask about qualifications and experience.
Eco-Tax, Inc: Outsourced Financial Services
At Eco-Tax, we provide our clients with a unique, customizable, one-stop shop for small business financial needs. If you’re curious about our bookkeeping service, we would love to explore our options and answer your questions.
Get in touch at 866.968.4848 or fill out our free consultation form. One of our experts will respond shortly!