In business, accurate financial reporting can mean the difference between thriving and merely surviving. I’ve seen firsthand the profound impact that expertly prepared financial statements can have. Many business owners try to manage their own bookkeeping or delegate it to untrained staff, leading to costly errors and missed opportunities. Hiring a professional bookkeeper for small business ensures precise financial records, informed decision-making, and allows you to focus on your core strengths.
What is the primary purpose of a bookkeeper for small business?
Hiring a bookkeeper means bringing in someone with the training and experience to create accurate financial statements. A professional bookkeeper works with these tasks daily and has specific expertise in accounting and the software used. This expertise minimizes the risk of errors that someone without such experience might inadvertently make.
A good bookkeeper will ensure that:
- Your expenses are consistently categorized
- Your bank statements are reconciled every month
- Nothing is double-counted or omitted from your financial statements
- Checklists and procedures are used for bookkeeping tasks
- Your financial statements are reviewed for accuracy before being presented to you
And that’s just the base level of bookkeeping. Bookkeepers can provide many additional services, and not every bookkeeper offers the same services. It’s essential to find someone with the right expertise and service offerings for your needs.
What kind of business owner should always use a bookkeeper?
Several types of business owners should not go without a bookkeeper. One is someone who feels completely out of their depth when dealing with numbers and finances. If numbers and accounting confuse you, hiring a bookkeeper can be a significant help, even if your business is just starting out with a limited budget.
Another type is the busy business owner who doesn’t have time to keep up with their bookkeeping. If you start to fall more than a month behind, it’s time to hire a bookkeeper to keep your records current.
Some business owners do their bookkeeping at the end of the year to prepare for taxes, but this approach can lead to forgetting important details and missing out on revenue or tax deductions. If you have expertise in accounting and doing your own bookkeeping is not a distraction, then you might manage it yourself. However, for most, hiring a bookkeeper is a more efficient and accurate solution.
What does a bookkeeper do beyond the basics?
Beyond basic bookkeeping, we offer services such as accounts payable management. As businesses grow, owners may not have time to handle bill payments. We can implement processes and checks to ensure vendors are paid on time, reducing fraud risk and aiding IRS compliance.
Another service is invoicing and following up on open balances to ensure you get paid. We can create invoices, follow up on unpaid ones, and set up tools for automatic client charges for better efficiency.
When you start having employees on payroll, managing it can become complicated. Many payroll providers suggest you can do it yourself, but the things you don’t realize you don’t know can create significant headaches. It’s wise to have a bookkeeper handle payroll management.
The benefits of a next-level bookkeeper
A higher level of bookkeeping service helps you understand your financials, what the numbers mean, and how they can inform business decisions. Regular meetings to review financials, plan, and forecast cash flow are essential. We also compare budgets to actuals, helping you stay accountable to your financial goals.
Customized bookkeeping for your industry
A chart of accounts is a comprehensive listing of all accounts used to record financial transactions in your business. I start with a standardized chart of accounts specifically designed for agencies, which ensures most typical economic activities are covered. However, every business is unique, so I customize this standard framework to fit your specific needs.
This customization means adjusting categories to reflect your particular revenue streams and expense types. For example, while one agency might need detailed breakdowns of marketing channels, another might require a more nuanced separation of project expenses. This tailored approach ensures that your financial statements are not only accurate but also provide meaningful insights into your business operations.
By customizing the chart of accounts, I help you get the most relevant information out of your financial statements, enabling you to make informed decisions and better understand your financial performance.
Which financial statement is most important for small business?
When business owners review their financials, they often prioritize the income statement, or profit and loss (P&L) statement, to gauge profitability. While the P&L is essential for showing revenue and expenses over a period, it’s equally important to review the balance sheet.
The balance sheet provides a snapshot of your business’s financial position at a specific point in time, detailing assets, liabilities, and equity. It reveals critical information about your cash position, liquidity, and overall financial health, which might not be apparent from the P&L alone.
A good bookkeeper prioritizes the balance sheet because it helps identify common accounting errors and offers a comprehensive view of financial stability. Neglecting it can lead to missed insights about your business’s true financial state. Therefore, for a complete understanding of your business’s finances, both the income statement and the balance sheet are indispensable.
Hiring a bookkeeper for small business can be a game-changing investment for your business, allowing you to focus on growth and ensuring your finances are expertly managed. The difference a professional bookkeeper makes is significant, providing peace of mind and enabling informed business decisions. If you don’t already have a knowledgeable and professional bookkeeper, it’s time to hire one. As a bookkeeper, I see the transformative impact of this every day and am passionate about helping businesses know their numbers and grow.
Learn more about my services as a contracted bookkeeper.
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