Are you carrying more responsibility than you need to within your small business? As a business owner, it can be hard to let go of the control of certain tasks that need to be done. Too often, business owners spend their time on busywork, resulting in a situation where there isn’t enough time left for some of the most important activities to help the business grow.
If your business is growing, you can only get away with Do-It-Yourself bookkeeping for so long. Maybe you have a really great spreadsheet template you found online. Maybe you even shelled out for some accounting software. But as your business expands and your financials get more complex the need for small business bookkeeping services will increase.
While there’s no hard-and-fast rule to when you should bring on hired bookkeeping help, there are some common, telltale signs that entrepreneurs experience just before they reach the tipping point.
#1. Your Books Are Never Up-to-Date
Falling behind on your books can be a serious issue for small businesses. If your books are not up-to-date chances are they don’t reflect what’s actually going on in your business. If you don’t accurately understand your cash flow and the health of your business, you are setting yourself up for failure.
For example, lets say your Cost of Goods Sold (COGS) hasn’t been updated in six months, you can’t subtract if from your revenue in order to determine how much profit you’ve earned in that time. This means you’re blind to how much money you’re actually making—and the steps you can take to increase your income.
What’s more, if your books aren’t up to date, you’ll have a ton of catch up bookkeeping to do during tax season, making a typically stressful time of year even more difficult.
With a qualified bookkeeping solution, you can expect to receive monthly financial statements, so you’ll know where your money is going to and coming from.
#2. You do not know how much money you are making or spending
Your small business has to make money to survive. If you don’t know your revenue, you cannot plan to increase it. If you do not track expenses, you cannot cut costs. And if you lack understanding of the total money coming in and out of your business, you open yourself to numerous problems such as fraud. Small business bookkeeping services in Phoenix can generate clear basic reports that show sales and expenses. In addition, they can provide a wealth of knowledge on how to grow revenue and reduce your costs, since they are familiar with the day to day operations.
#3. Spending too Much Time on Your Books
Business owners often wear multiple hats when running a business. This is why many feel the need to try and handle their own books to cut costs. However, if you find yourself doing bookkeeping data entry or talking tax deductions late into the night, it may be time to bring in extra support. Small business owners work hard throughout the day and shouldn’t have to sacrifice missing family time or personal hobbies every day. Small business owners should focus on business development, brand strategy, client relations, and marketing as opposed to small business bookkeeping.
Working late to the point where it cuts into your sleep means you are on the fast-track to burnout. Instead of spending your nights trying to stay current with the bookkeeping tasks, bring in the experts so you can turn your attention to your services and customers.
#4. Tax Season is a Nightmare
Tax season seems to be a complicated and crazy season form any small business owners. When you hire small business bookkeeping services, however, it won’t be! Here is how tax season should look with the proper staff in place:
The financial year ends at midnight, December 31. Whoever does your bookkeeping hands off your financial records for the year to your accountant. Your accountant uses those records to file your taxes. Later, you receive a tax refund. The end.
But if you have messy or incomplete books, your tax season will look very different. You will probably be caught in an email or phone back-and-forth as the two of you puzzle your way through a year’s worth of uncategorized expenses and income.
#5. You missed out on Tax Write-offs
When running a small business, every penny counts. Why not receive refunds for the deductions your eligible for? The sooner you know about small business tax deductions, and the sooner you take advantage of them, the sooner you’ll benefit.
Part of a small business bookkeeper’s job is to take every business expense you incur and categorize it properly. In the process of doing so, they’re able to spot obvious deductible expenses such as mileage.
Additionally, a good bookkeeper doesn’t just help you during tax season. A good small business bookkeeper who understands your business’s needs can help you out during the rest of the year.
#6. Missing Payments from Customers
You need money from your customers to keep your business going each month. It’s extremely common for businesses to have overdue payments from customers. Small business owners need to have a system in place to follow up on these payments to ensure you have the cash flow to keep up with your small business expenses. If you aren’t consistent about tracking and following up with payments that are due there is no doubt that the outstanding payments will result in a domino effect that could topple your business in the future. Small business bookkeeping services in Phoenix can help insure proper invoicing and collecting systems are in place at your business.
#7. Your Cash Flow is Unpredictable
Ever have that sense that you’ve got money coming your way from clients, but you’re not sure how much it will be—or when it will arrive? Or do you come up with an empty wallet when it’s time to pay your employees?
If your answer is yes, it is essential you get your cash flow statements up-to-date! A cash flow statement tells you how much money other people owe you, and how much money you owe other people. With a proper bookkeeping solution in place, you can get updates on your cash flow every month.
Final Thoughts
There are multiple warning signs your small business should consider small business bookkeeping services in Phoenix. Inaccurate or books that are not updated can have a serious impact on your business growth and decision-making abilities. Time is your most valuable asset, and if you are spending the majority of it on your books, then little time is left to focus on business growth. By outsourcing your accounting to small business bookkeeping services you can focus on activities that will generate revenue.
Limitless Investment and Capital Small Business Bookkeeping Services in Phoenix
When all signs point to upgrading from DIY bookkeeping to professional help, it’s time to plan your next step. Limitless Investment & Capital’s small business bookkeeping services are helping numerous small business in Phoenix and Denver get their financials on the right track! Time is your most valuable asset, and if you are spending the majority of it on your books, then little time is left to focus on business growth. Let’s get a conversation started today!