Many small-business owners start out doing everything themselves: sales, marketing, HR, IT, even keeping their own books. As they stretch themselves thinner and thinner, they try to offload as many responsibilities as they can in an attempt to keep up.
If you're thinking of starting a small business, you can learn from this common mistake. Identify what's core to your business, and what can be outsourced, before you open your doors. Take advantage of all the cost-effective expertise that's available today. Because the DIY, learn-as-you-go approach to things like bookkeeping can result in costly, easily avoidable mistakes.
From Recording Transactions to Financial Reporting and Forecasting
In simplest terms, a bookkeeper records a company's financial transactions at regular chronological intervals — day by day, in most cases. While the definition is fairly straightforward, keeping up with a company's financial reporting can be time-consuming and complicated, depending on the nature of the business.
Many small-business owners quickly determine that tracking all the money that's coming into and going out of their business on a daily basis — and reconciling those figures at weekly, monthly, quarterly and yearly intervals — requires more bandwidth than they can spare. That's why a growing number of businesses are choosing to outsource their bookkeeping and operational support. Modern bookkeeping services can leverage technology (including the cloud) to ease the business owner's workload as well as provide improved financial reporting and forecasting.
Working With Your CPA for an Efficient Process
Another advantage of using an outsourced bookkeeping services provider is that it reduces the stress at tax time by smoothing out the handoff to your CPA.
It's really pretty simple: In order to prepare tax returns, CPAs need thorough, accurate records — the kind that an outsourced bookkeeping service can provide. If you think you're saving money by having your office manager handle the books, wait until you get the bill from your CPA at tax time, after he or she has spent hours — with the meter running — sorting out your office manager's work.
Don't have a CPA, either? Most outsourced bookkeeping services have networks of CPAs that they use on a regular basis, which helps ensure good communication and minimize the chances of delays or mistakes at tax time.
Gaining Real-Time Financial Insight
An additional benefit of using an outsourced bookkeeping services provider is that you can begin tracking key performance indicators (KPIs). That's a great way for business leaders to gain new insights into their company's financial health.
Outsourcing can give you access to all sorts of high-level expertise, from input on how to make tax laws work in your favor, to advice on improving your profit margins, to using technology for a proactive rather than reactive approach to financials.In short, outsourcing can not only save you time and (in the long run) money, but also provide a level of service and professionalism far beyond what you could attain by doing everything yourself.