Business owners oftentimes do not take bookkeeping as seriously as they should. Bookkeeping is the recording of financial transactions and is part of the process of accounting in business. A business owner might need bookkeeping services so as to have up-to-date financial records. The transactions to be recorded include purchases, sales, receipts, and payments by an individual person or an organization/corporation.
The foundation of proper accounting is to have a detailed bookkeeping record of how you can build your financials on. Poor accounting can affect the success of your business, proper bookkeeping and accounting can increase the chances that your business will be successful.
Your business needs bookkeeping services if:
1. You do not have the knowledge of bookkeeping
The first sign that your business needs bookkeeping services is that you don’t know how to use accounting software. If this is the case, you can look into hiring a professional accountant who will come in and teach you how to use the software.
Another sign that your business needs bookkeeping services is if you are not confident in your bookkeeping skills or are unsure of how to take advantage of all the tax deductions available to businesses.
2. Your bookkeeping records are incomplete or nonexistent
This can be a red flag that your business is not running smoothly. If you’re missing receipts, payments, and income or expenses—and especially if you’re missing them consistently you might just be in need of bookkeeping services.
You need to keep track of these things so that you know what’s going on in your business and can make sure it’s operating as efficiently as possible. It might seem like a small thing, but if these records are inaccurate (and there are many reasons why they might be), then this could result in significant losses for your company.
Also read: WHY YOUR SMALL BUSINESS NEEDS A BANK ACCOUNT
3. Bookkeeping takes too much of your time
You might have knowledge of bookkeeping but it takes you a long time to complete the report. As a business owner, you have a lot of business activities that need your attention, and most likely you are unable to complete your bookkeeping in time. You should consider employing the services of someone to take up the bookkeeping aspect of your business. It will help you focus on another aspect of your business.
4. You are only updating your books before tax season
If your bookkeeping has been sporadic or non-existent, it could be time to take a closer look at how you’re doing business. If you are only updating your books before tax season and then putting them away for the year, it may be time for a professional accountant or bookkeeping service provider to help.
Bookkeeping is an ongoing process that requires regular updates throughout the year. Bookkeepers know that they need to keep track of all transactions—not just those related to taxes—and provide accurate reports so their clients can make better decisions based on real information rather than misinformation.
5. You do not have confidence in your bookkeeping skills
If you are not confident in your bookkeeping skills, it may be time to get some help. There are a number of ways that an accountant can help you with your business finances. They will be able to provide guidance and advice on:
- How to use accounting software such as QuickBooks or Xero
- How to keep track of your finances (and what should be included)
- What information should be included in financial statements
6. If you are not sure of how to take advantage of all the tax deductions available to you
Tax deductions are not just for big businesses. They can also be used by small- and mid-sized businesses, as well as sole proprietorships and partnerships. The FIRS has a long list of tax deductions that are available, but it’s important to keep in mind that certain things may not be deductible if they don’t fit within the parameters of what is considered “ordinary” business expenses (that means your company doesn’t earn enough money). And even if they do fit within these parameters, some expenses could still make sense because they’ll help grow your business—and reduce its tax liability at the same time!
Also read: 7 reasons you should never use your personal bank account for your business
7. You do not have time to grow your business
If you are not able to grow your business, it is time for you to hire a bookkeeping service. You will have more time to focus on growing your business and improving its performance. You will also be able to spend more time with customers, employees, and families if you have someone else look after the books for you.
With all the work that goes into running a successful business these days (and before), most entrepreneurs don’t have much time left over for themselves or their families—if anything at all! Having an accountant or bookkeeper take care of this stuff ensures that each member of staff has enough hours in their personal schedule so that they can take care of what matters most: running a successful company!
8. You are late with payments and cash collections
When you as a business owner do not have time or the knowledge for business bookkeeping, you most likely will be slacking in payments of employee(s) salaries, vendors, and collections of cash from creditors. This will have a ripple effect on your business performance.
9. You are not making as much money as you could be
Hiring bookkeeping services can help your business increase revenue; it will help increase your company’s efficiency and productivity, decreasing the costs associated with late fees, interest charges, and missed tax benefits. This way you have the time your entrepreneurial spirit needs to strategize, negotiate, and ultimately generate a higher level of income for your business.
While for a start as a business owner, you might need to multitask and oversee a couple of aspects of your business that needs attention. As time goes on, you should review certain roles so you can ascertain if you are doing them properly or if you need to employ a professional to assist you in achieving the optimal result for some of those aspects.