Up-to-date books (financial statements) are critical to understanding what’s going on with your business. You don’t need a CPA to do your accounting, but, chances are, you do need some bookkeeping help. While giving up control of your books may seem counterintuitive, most entrepreneurs who do so soon realize that they weren’t doing as well on their own as they thought. A bookkeeper can help you find software that:
- You can use and that can be easily integrated with your bank and credit cards
- Reduces the time you spend on finding and tracking cash and expenses
- Produces on-demand financial statements so that you understand your business and can focus on a strategy to make your business more efficient
Here are a few signs that you’re ready to hire a bookkeeper.
Revenue is growing, but profits are lagging.
If your revenue is growing, but your bottom line isn’t, you need to spend some time understanding why. Higher revenue and lower profits don’t always signal something wrong but focusing on how you make money is critical. Your financial statements (balance sheet and income statements) provide important information on how and where your business can grow.
Transactions are increasing, and the time you are spending to reconcile is taking you away from selling and growing the business.
More transactions usually mean increased costs. You are spending more time processing. Therefore, your production is waning. Conduct a little research — for one month, keep track of the amount of time you spend on your books. Then figure out how much your time is worth per hour and multiply it by the number of hours you’ve spent on bookkeeping to determine the true cost of your bookkeeping. Odds are, it’s more than if you actually outsourced your bookkeeping.
You shouldn’t be spending all your time on accounting tasks. Know when to outsource to grow, it will create long-term value. You’ll never look back and regret having more time to focus on your business.
You are stressed about year-end tax planning.
If your year-end is stressful because you are disorganized and haven’t planned all year, then you are ready to hire a bookkeeper. A bookkeeper can help you stay organized and relieve the stress of your not knowing your tax liability. As an added bonus: Because bookkeepers know how to sort and categorize expenses properly, they often make spotting tax deductions easier, as well.
Cash flow suffers because you aren’t sending invoices on time, and chasing the payment is taking too much time.
In business, cash is king. If you’re not bringing in enough capital to cover your operations and buy the equipment and supplies you need, then your business will flounder. You also need to invest back into the business to grow. If you’re not able to focus on sending invoices and collecting payments, it’s time to let someone else do that.
Forecasting is difficult
Being able to forecast cash flow is important. Accurate cash forecasting allows you to plan and budget, but accurate cash forecasting is impossible without accurate and updated books. You need a bookkeeper to provide you with data in real-time so that you can make good decisions about when and how much to invest in your business.
We can help
At Virtuous Partner, we provide the accounting and bookkeeping expertise to help your business grow. We are proactive in reorganizing your finances to make it more profitable. We can
- Organize your books so you receive the timely information you need and don’t struggle at tax time
- Develop budgets and cash flow forecasts to provide the data you need for effective decision-making
- Help with capital asset planning so that you can grow your business
We are experienced bookkeepers and accountants who help you continue with what’s working and weed out what isn’t. We are your strategic partners who provide you the data you need while giving you time to work at your business. Make the smart choice for your business, and contact us today.