In the early stages of getting a business off the ground, it is common for business owners to drive the entire business themselves. From daily operations to the backend support, plus everything in between. However, managing your business is no small task. It might be manageable in the beginning, as you scale, it will become more challenging for you to keep track of everything.
Handling the financial side of your business when you are not a professional is a precarious decision for your business. To an untrained eye, it simply means keeping track of your financial activities– but a professional understands the significance and integrity of financial management to a business. One basic, but no less important aspect of managing your financials, is bookkeeping.
There is no set of rules to determine when you should hire a bookkeeper in Oakville or anywhere else, but there are some common tell-tale indicators that business owners experience just before they reach the tipping point.
If you are experiencing any of the following symptoms, it’s probably the time your business needs to hire a bookkeeper.
1. You don’t have enough time to manage everything.
There is nothing more important to a business owner than effective time management. If you are trying to juggle sales, marketing, shipping, client dealing, bookkeeping at once, something is going to suffer. Bookkeeping is not a task you can put off– it should be done on a daily basis. Due to its tedious and time-consuming nature, it can make you less efficient as a manager, if you keep handling it on your own. So better leave this to a professional bookkeeper and shift your focus towards driving your business towards success. You may have a concern that hiring a bookkeeper would cost you. But trust me, not taking one would cost you the whole business.
2. Your books are not appropriately updated.
When you fall behind on bookkeeping, your books stop reflecting the actual financial state of the business. That makes it harder (sometimes impossible) to manage cashflows, understand and gauge the financial health of the business.
What’s more, if your books are not timely updated, you will have a ton of catch-up bookkeeping to do during tax season. Making a typically stressful time of the year even more burdensome. Your outdated books are a sign that you need to hire a bookkeeper. A bookkeeper will keep a dedicated eye on your financial activities, manage them timely, resolve any issues proactively hence bringing your business on track in no time.
3. You are paying extra to your accountant to do your bookkeeping.
You first need to understand that bookkeeping and accounting are not the same. Bookkeepers record financial transactions and accountants analyze and interpret this financial data. Making your accountant do bookkeeping will have two implications. You are overpaying your accountant for doing a job a bookkeeper would do in less and also not taking full advantage of the accountant’s actual expertise.
4. You missed out on tax deductions.
You might not be aware that many business expenses are tax-deductible. These deductibles can be offset to your total business income and reduce the tax liability. You have likely missed a few tax deductibles over the years because you never tracked them. It is highly likely to miss obvious tax write-offs when you are scrambling to update your books in the nick of time. A bookkeeper will properly categorize every business expense, organize the records, and help you pay your taxes on time.
5. You are facing mismanagement in your business activities.
In many cases, it is observed that businesses experience disarray because of a lack of appropriate bookkeeping. So, if you desire your business to be well organized and successful, you need to keep your bookkeeping organized.
6. You are late at paying bills.
Late payment of bills is not good for the reputation of the business. It gives the image of messy account management. Not realizing the importance of bookkeeping can also adversely impact the payroll system. This can have far-reaching consequences for the business. If you take professional help from a bookkeeper in Oakville, you can shield your business against late payments.
7. Your business receipts/income are not collected on time.
Losing your grip over the business’s collection loosens your business muscle. With an irregular income, you can never have a stable and smooth business sail. An efficient bookkeeper will invoice the customers on time, record the transaction, and follow up for any delays from the customers. This will ensure a regular predictable income stream for the business.
8. You are not a professional bookkeeper.
Lack of comprehensive knowledge and expertise can be sometimes hazardous for the business. Even if you think that you know bookkeeping, but you have doubts about whether you are managing your books properly– you better delegate this responsibility to a professional bookkeeper. You can also check out on accounting firms for accounting and bookkeeping services.
9. Unpredictable business cashflows.
You need to watch closely if your business is facing cashflow issues. It could be due to any reason such as insufficient client work, unforeseen expenses, late payments, delayed receipts. Whatever the reason is, it is a red alert for you to keep a bookkeeper to find out where the leak is and manage it accordingly.
10. You need a break.
The cumbersome job of bookkeeping may drain your creative energy and affect your efficiency level. You feel overworked and tired. Then it’s time to hire a bookkeeper to free up your time and headspace so that you can rekindle your passion and reconnect with the objective you started your business with.
Don’t take your own time for granted. Not only does overworking lead to burnout, but every second you spend working has a dollar equivalent. You must have heard “time is money”. Once you treat the time you spend on bookkeeping as an actual expense in cash, you will have a better understanding of whether you keep doing it yourself or hire a bookkeeper.
Managing your books, yourself may be easy in the beginning. You merely use Excel, an online template, or even better – accounting software. But as your business grows, so too does the paperwork and your financial needs.
Being a small business owner, you may want to gear up your business in every possible manner. Hiring a bookkeeper is a valuable investment for a business. With the support of a bookkeeper in place, you can handle your business more efficiently. You will be able to figure out where you lag and where you need to improve.
Do it yourself approach to bookkeeping becomes counterproductive as the business grows. This blog has highlighted the main indicators to reflect that your business needs to hire a bookkeeper. Considering the alerts if you are looking for a competent bookkeeping service in Toronto, Oakville, Hamilton or Mississauga feel free to reach out to Filing Taxes at 416-479-8532? Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting firms and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.