Yes, this is what one small business owner told me recently. It’s not unusual. In the many networking events I attend I encounter this perspective often. They aren’t always wrong. If a business it just starting up, the cost of a bookkeeper may be beyond their resources. If they don’t have a lot of transactions or bills, then they might be able to sort it out themselves without assistance. The problems occur when they start to grow or when they fail to understand the basic concepts of the accounting equation.
I’ve witnessed a few things happen:
Problem: The owner assumed that if Quickbooks let him do it then it must be right.
The impact: Months of incorrect entries and transactions are costly to clean up. The cost of hiring someone to fix the mistakes became more expensive that the initial investment of a good bookkeeper would have been. The investment to fix the books became necessary as the business needed a loan to grow.
Problem: Single entry accounting used when double entry accounting was necessary.
The impact: Lost revenue.
Problem: Inappropriate internal controls & books that were months behind
The impact: Employees were using the business like a personal atm and the business owner had no idea because the accounts were never reconciled and transactions were not reviewed.
Problem: Owner thought they were profitable, but they were not appropriately recording liabilities or expenses.
The impact: The company was investing in multiple products and services that were not profitable.
Problem: Only one person in the business had access to the books or the financial reports and he didn’t share that information with anyone.
The impact: The other staff had no idea how close they all were to shutting down. The weight of the finances was causing that one person extreme stress and the problems were not solved.
These are just a few examples of things that can go wrong without a professional bookkeeper, but the most compelling reason to hire a bookkeeper is to free up your time to focus on growing your business! Every minute a business owner spends on bookkeeping is not spent on the vision, goals, and operations necessary for a thriving business. The value of a business owner’s time usually outweighs the cost of even a higher-priced bookkeeper.
One of the best investments you can make in your business is to invest in its financial health. Hire a bookkeeper to take care of the day-to-day finances and have them explain the financial reports monthly.
To see if you qualify for a FREE consultation with a virtual bookkeeper, start here: https://good-focus.com/take-action
Photo by Markus Spiske on Unsplash