SBS Tax and Consulting Services
Why you need a bookkeeper
Updated: Dec 7, 2021
Are you a new company trying to grow your business to the next level? Are you a well-established small business with solid client base? Are you a freelancer working with multiple clients?
Regardless of the size of your business, bookkeeping is important for helping you maintain accurate financial records. Hiring a right bookkeeper for bookkeeping is one of the step for you to be successful in your business. In fact, “ poor accounting” of the top reasons why businesses fail. Without a good system of bookkeeping or accounting, you are blindly driving your business.
Some business owners decide to manage their book by themselves in an attempt to save money, unless you are a well-trained bookkeeper or accountant, otherwise there are a lot of benefits to hiring a bookkeeper that you may not even realize. Here, some factors will make you need a professional bookkeeper for your business:
1. Financial management and analysis
Bookkeeper refers to the records, and especially on a daily basis of a company’s financial transaction. For bookkeeper, they are people who will manage all the financial data for the company. Well trained professional bookkeepers will not only enter your company’s financial transactions into the data system, they also need to manage the financial transaction and analyze data based on the transaction to give advice to business owners.
Every business owner should know that the more important thing need to run the business is cash flow. If run out of cash, the business will face a lot of debt problems. If too much cash on hand, it might not be a good thing in the business standpoint. It is indicated that the company might miss the payment for some bills or doesn’t’ invest enough to grow the business.
Once the company’s invoice delay, there will be late of receiving payment from the clients, and it may cause the company to pay the suppler late. One of the responsibility of the bookkeeper is to help you get a sense of your past as it pertains to your future. They will systematize up to send out invoice to your client for revenue and to process on time payment to your supplier. They should have a clear picture of when you are expected to receive the payment from your clients, and when you need to pay your invoice to your vendors, because the actions can be analyzed based on the past actions. By implementing a good cash management, your business cash flow will be well smooth.
2. Fulfilling tax obligations
With your bookkeeper, it will keep track of all your documents and information, so you can accomplish your annual taxes. During the time of tax preparation, you will not need to rush to try to find the bill or remembering the expense that you paid in the middle of the year. Also, the process of tax preparation will be much easier if your bookkeeper prepared the organized annual income statement and balance sheet for you.
One insider tip for your business is that if you hire a bookkeeper to do your bookkeeping work in a monthly or quarterly basis will cost you lesser when you hire a tax professional to prepare your annual company tax return. However, in order for tax professional to prepare your company tax returns, they need well-organized and accurate financial statements from your company. If you don’t have it, they will do the bookkeeping works for you, and they will charge you more on the bill since the rate of tax professional is higher than bookkeeper.
3. Give you more time
When you hire a bookkeeper to manage your book, you have more time to spend on other aspects of your business. For instance, your rate on your business/profession is $60 per hour and the cost of hiring a well-trained bookkeeper would cost $20 per hour. If you hire a bookkeeper for an hour to do the bookkeeping work, then you have an additional to earn $40 ($60 -$20) from your business/profession.
For many business, this represents more time they could be out making money and more time growing their business. It also mean you, as a business owner, don’t have to worry about learning new software or how to recognize revenue and record expense.
4. Making smarter business decisions
As mentioned above, a good bookkeeper can offer the most valuable data of your business, so you can make more informed decisions for your business on a daily basis.
For example. By looking at the accurate financial statement, you can see how much you actually earn and spend for the period of time. By looking at the comparative sales report, you will have an idea of what is popular product that you are selling. Furthermore, you will be able to point to specific trends to guide your next steps all while making confident decision for the future.