The Value of Bookkeeping For a Small Business
When running a small business, one of the top priorities any business leader should have is ensuring the finances are in order. While revenue and cash flows are imperative to the survival of a business, proper accounting and financial management are key elements to any business’s success.
Whether hiring a bookkeeper or engaging a third party, outsourcing the accounting function of your company allows you to focus on growing your business while feeling confident that your finances are in check. What’s more, the rates for hiring a bookkeeper, particularly at the early stages of a company, are incredibly reasonable, and the benefits of doing so far outweigh the costs.
Here are the top five ways a bookkeeping service can add value to your business:
1. Free You From The Burden of Accounting
Let’s face it, you didn’t go into business to sit in front of a spreadsheet all day and crunch numbers. While landing a new customer or releasing a new product is exciting and rewarding, balancing your bank account, paying invoices, and filing taxes doesn’t quite hold the same appeal. Hiring a bookkeeper, whether as a permanent member of staff or through an outsourced service, can release you from the burden of managing your books and allow you to focus on networking, marketing, product development, and all of the wonderful things that entrepreneurs thrive on..
2. Always Pay Your Bills On Time
Building relationships with suppliers and creditors are necessary aspects of good business practices. Maintaining those relationships, however, is even more important. The last thing you want is to have deliveries halted, manufacturing stopped, or assets seized because you failed to meet your commitments. A good bookkeeper will help you stay on top of these payments, ensuring bills are paid on time and business relationships remain intact.
3. Managing Payroll
While you be the only one on the company payroll today, it hopefully won’t be too long until you’ve got a more robust team. When that time comes, a trained bookkeeper will help manage your payroll needs, ensuring payments are made timely and taxes and benefits are recorded appropriately.
4. Financial Reporting
One of the key elements to making informed business decisions is having the right information at hand. Understanding the true state of the business – how much money was spent last month or the recurring cost of a certain tech tool – is key in driving your company’s growth. Bookkeepers can provide regular reporting to present this information in a way that’s most useful for your needs. This reporting allows you to stay abreast of exactly how the business is doing and make smarter, more informed decisions.
5. Avoid Unnecessary Fees Or Payments
Understanding your cash position is a huge element of running a business. A bookkeeper’s first step in any financial close process is entering and reconciling all bank activity an accounts. Put simply, this allows you to write a check with confidence and avoid overdraft fees or additional interest on loans or any other outstanding debts.
Besides managing the day-to-day financial aspects of running a business, proper bookkeeping gives you the flexibility to better run your business, make informed, proactive decisions, and better understand your financial position today in order to plan effectively for the future.