Bookkeeping is a very important part of a business and goes above and beyond simple math. Small businesses, in particular, will generally try to do it themselves, as a way to save money. However, this may not always be a good idea, because mistakes in bookkeeping can be very costly.
So what are some of the mistakes small businesses make, and why might it be advisable to outsource your bookkeeping?
1. You Try to Do Everything Yourself
A lot of small business owners want to do everything themselves. That is how they started and that is how they would like to continue. Accounting is an important part of that, but as the business grows, so does the time that has to be spent on taking care of bookkeeping. The reality is that it is impossible to do everything yourself. Remember that time is money and you want to make sure things are done right so that your business can grow. Hiring someone who can work with QuickBooks and deal with your accounting requirements is a much better idea.
2. You Try to Find the Cheapest Option
Obviously, you don’t want to spend too much money either. However, you have to think about the return on investment. First of all, by hiring an external accounting professional, you are freeing up time, which can be spent on other things. Secondly, it means that you are less likely to make expensive mistakes. Remember that you always get what you pay for.
3. You Mix Business and Personal Money
It is very common for small and new business owners to run their business finances through their personal account. They may also use their own credit cards to make payments for certain things. In fact, paying for certain expenditures out of pocket is often a necessity. However, you must make sure that you keep a proper record of this so that you can deduct it, which is something that a qualified accountant can show you how to track expenses correctly.
4. You Do Not Use the Right Bookkeeping Technology
The right software, like QuickBooks, can you with the bookkeeping , so long as you complete the steps that are required every time. A lot of business owners still use Excel instead of dedicated tools, but these spreadsheets allow for a lot of errors. If you insist on doing your books yourself, then you must stay away from traditional spreadsheets like those that you can create in Excel.
5. You Don’t Have Backups
This is a very common mistake. Businesses often try their very hardest to have proper software tools in place and proper filing systems, so that they have all the information they need at the right time. However, they often forget that a tornado could hit, or a fire, or that a pipe could burst that destroys everything they have worked on. Not having a backup means all the information is lost. Any good external bookkeeper will store the information on the cloud, which means it is never lost. They will generally also keep scanned copies of physical documents that have to be saved on the cloud.
It is likely that you, as the owner of a small business, are more concerned about making your business successful than about accounting and bookkeeping. When you opened your business, it is because you had an entrepreneurial idea and you wanted to do something to make a living. Unfortunately, as boring as that may seem, you must also focus on your accounting. In fact, you should look at accounting as if it is an investment. It is all too easy to make any of the above five mistakes and then some, but you are far less likely to fall victim to them if you outsource your bookkeeping services to a professional. Doing so will ensure your books are all up to date and in order. Most importantly, it means that you can focus your energy on the things that really matter to you: getting your business off the ground.
There are many other good reasons to hire a bookkeeper to assist you with your books. Payroll Professionals, Inc. of Omaha has individuals that are dedicated to helping small and medium sized businesses in the Omaha area. Please contact us today to learn more about how we can help you with your bookkeeping and payroll processing.