Solid accounting and bookkeeping is essential for business success. While some small businesses can take care of their basic accounting in the initial stages, as a business grows, its accounting needs inevitably become more complex. Invoicing, collecting payments and paying suppliers are all essential to keeping the engine of a business running, and a skilled bookkeeper or accountant can ensure that it’s all done well.
Outsourcing your bookkeeping and accounting can also allow you to maintain focus on what you’re best at: running and growing your business. If any of the following five signs have occurred in your business, it’s probably time to consider hiring a bookkeeper:
1. You’re Behind on Bookkeeping
Getting behind with accounts payable and receivable is a definite sign you’re in over your head when it comes to bookkeeping. The stress of having vendors contact you for payment as well as being owed money can take its toll very quickly. Getting behind on bookkeeping means you don’t have a grasp on the true numbers of your business; they will be inaccurate and/or incomplete, meaning you won’t be able to make informed, educated business decisions.
Not sending out invoices in a timely manner will hurt your cash flow, and being late in paying vendors could affect your supply chain in the future. Having to “chase” clients that are behind on payment will also add to your stress. Outsourcing this duty to a third party allows you to separate it out from the face and brand of your business.
2. You’ve Received a Request for Financial Statements
If you’re already behind on bookkeeping and you’ve received a request from a business advisor or banker for financial statements, this could compound your stress. Catching up on your own will require you to drop everything and devote valuable time and energy to getting your books back up to speed. This type of request could be the catalyst that compels you to hire a professional.
3. You’re not Fully Cognizant of Your Cash Flow, Profits and Losses
If you don’t have a firm grasp on how your business is performing, this is likely due to issues with your bookkeeping and accounting. Inaccurate accounts receivables means you cannot be sure if clients are late in paying you. If you’re behind in your bookkeeping this likely means you aren’t keeping good track of your expenses, which could be a big problem if you are ever audited. An accountant can help you to keep track of those receipts and expenses, ensuring that you’ll maximize both deductions and profits.
4. You’ve Hired Employees and are Not Sure How to Handle Payroll
Hiring your first employee is a landmark threshold to cross as a business, but once you do, a multitude of new accounting considerations accompany it. From employees and contractors to multiple locations and continued growth, as your business increases in complexity, you’ll have more paperwork and administration tasks to take care of. Tax laws in these areas can be complex, and you won’t want to risk handling it incorrectly. It’s also time-consuming due to the learning curve, and as a small business owner you’ll want to think twice about handling it all on your own. Daily, weekly and monthly operations will become more complex, and a bookkeeper can help keep you current and in compliance.
5. You’re Having Trouble Meeting Tax Deadlines
Scrambling to meet tax deadlines, missing deadlines or filing late and having to pay penalties are all signs that you need an accountant. While it is possible to file extensions for some deadlines, not making quarterly and year-end tax payments in a timely, accurate manner will lead to penalties down the road. Stop filing extension after extension and outsource your accounting to a qualified professional.
Efficient, accurate accounting is at the heart of every successful business. With a solid back office, you’ll have a foundation and framework for success. If your company has experienced one or more of these five issues, it’s probably time to consider outsourcing your bookkeeping. Reduce your stress levels and free up more time and energy to focus on your business by hiring a professional accountant today.