Just about every week I hear from someone who talks about how they save their business money by using someone other than a trained professional to keep their books. Often it's their spouse or a member of the office staff who takes on bookkeeping in addition to many other duties. Some business owners even do it themselves.
While this approach might seem to save you some money, many business owners discover that the learning curve for keeping their own books is steeper than they had anticipated.
Are You Getting What You Paid For?
I call it "the box." It's where many small businesses dump all the documents that their CPA might need. These paper-based records can be incomplete and unorganized, and they often don't go out to the CPA until the 11th hour. As a result, the CPA has to spend hours scanning, sorting and deciphering those docs-in-a-box in a mad rush to meet the filing deadline.
If that's how you handle your business' documents, do you know what your CPA is not doing during that deadline crunch? Providing the kind of top-notch advisory services that can yield huge tax advantages or other financial benefits. Basically, you end up paying top dollar for cleanup work performed by a tax expert.
Another cost of “the box” is the opportunity cost of missed information — the box contains important data that you could use to make real-time business decisions. If you don’t use this data on an ongoing basis, you could be missing opportunities to improve your business. As a friend of mine said, it’s like driving a car by looking in the rear-view mirror. If you take the time to analyze your financials on a regular basis, it will help you predict your cash flow and catch potential issues before they become expensive problems.
Turn to a Professional
If you're serious about your small business, it's time to outsource your bookkeeping to a professional. An outside bookkeeping service will see to it that your tax records are complete, accurate and up to date, and help you analyze your financial data on a regular basis so you can make better business decisions. (By the way, it's also time to discard the box in favor of 21st century technology.)
So go ahead — start thinking outside "the box."