Your business’s success depends on balancing the money coming in with the money going out.
Yes, it sounds obvious. But a surprising number of small business owners don’t spend time making sure that they understand their own finances. They dread—and perhaps ignore—their bookkeeping tasks, allowing expenses to run unchecked and leaving money on the table.
Most of us—especially ambitious entrepreneurs—would like to believe we can do it all. But the truth is: sometimes it’s okay (and even necessary) to get help.
How do you know when to get some bookkeeping assistance?
1. You’ve made a costly mistake
If you’ve found yourself on the other end of an angry IRS letter or a collections telephone call, your decision is easy. It’s time to outsource your bookkeeping, preferably before reading the rest of this post.
Not all financial mistakes can be fixed, but working with a bookkeeper who can get control of your finances and offer expert advice on handling creditors and past mismanagement may help you get back on track.
2. You’re ready to free up valuable time
Take an honest look at how many hours you spend managing your books. Perhaps you’re doing an excellent job at it, reconciling on a weekly basis and staying ahead of upcoming expenses. But could the time you’re spending be reallocated toward improving your business in other ways?
Consider your billable hourly rate: if you bill $100 per hour, and you’re spending four hours a month doing bookkeeping, could you pay someone $400 or less to do that job so that you can spend those four hours performing billable work for a client?
Or if you don’t work in billable hours, are there actions you’ve been putting off—like new product development, systems updates, or creation of a referral network? Could the hours you’re devoting to bookkeeping be better spent on those projects?
3. You have big plans for the future
If you’re hoping to build a scalable business—even if you’re just a one-person operation right now—creating a bookkeeping system that can scale as your business does will have you thanking yourself later.
As you continue to grow, bookkeeping will be an increasingly large part of the business tasks. And developing effective systems once your books have gotten complex is much more difficult (and expensive) than updating existing systems as you go. Muddling through until you’re in dire straits will cost you in the long run.
4. You simply hate doing your own books
If you constantly put off your bookkeeping tasks because you simply hate doing them, you are not alone.
In fact, small business owners rank bookkeeping among their least favorite duties. And that’s okay because there’s no prize for doing everything yourself. In fact, businesses that focus on their core mission and outsource other tasks are more efficient and achieve greater success.
So If you’re a one-person operation, you never plan to grow, you’ve never made a bookkeeping mistake, you have plenty of time for all your business projects, and you love doing your books, you probably shouldn’t hire a bookkeeper.
But if you’re thinking about how you might be using your time more effectively and getting a little giddy at the thought of taking bookkeeping off your to-do list, then it’s probably a good time to consider finding a bookkeeping firm that can help you and your business succeed.