More than five million entrepreneurs filed a new business application in 2021. Many of these new entrepreneurs left stressful corporate jobs to pursue their dreams and create more balance in their lives.
What new entrepreneurs don’t realize is that running a new business carries different types of stresses and challenges.
Entrepreneurs are totally responsible for the financial well-being of the business. They have to make sure there’s enough cash flow to meet payroll and pay vendors.
Successful entrepreneurs recognize these challenges and get help right from the start. They hire bookkeeping services and an accountant to help them manage the financial side of the business.
If you’re thinking you need financial management help, you should consider hiring a bookkeeper. Read on to learn the five benefits of working with bookkeeping services and how to hire the right bookkeeper.
1. Focus on Mission Critical Work
How much time and energy do you spend thinking about the financials of your business? You might be putting off sending invoices or reconciling bank statements.
You think about them and know they have to get done. You just want to do other things in your business.
Every time you think about what you have to do to manage your financials, you get stressed and your energy gets depleted.
Hiring a bookkeeper means that all of your energy can go toward mission-critical tasks. You know that your financials are getting handled with care.
2. Make Strategic Financial Decisions
What does a bookkeeper do for your business? They reconcile accounts, enter transactions, create and send invoices, and generate financial reports.
That last item is where bookkeepers can really provide value. They can generate profit and loss statements, cash flow reports, expenditure reports, and much more.
Those reports help you make better financial decisions. You’ll be able to gauge the financial health of your business. You’ll be able to make spending decisions based on those reports.
There are some bookkeepers that will go beyond the reports. They’ll explain what the numbers mean and how you can position your business to be in a stronger financial position.
Bookkeeping services like virtual CFOs help your business with long-range financial planning. Entrepreneurs often don’t have money set aside for retirement. Many entrepreneurs struggle from one month to the next.
A virtual CFO looks at all financial aspects of your business, from your business model to pricing. They develop plans to help you earn more revenue, and plan for taxes, retirement, and strategic business investments.
Learn more here about CFO services and what they can do for your business.
3. Potential to Save Money
There’s the potential to save money, but you have to have the right bookkeeper in place to see a return on investment.
Bookkeepers can take initiative and help you in your business. They can show you which expenses can get written off in your industry.
The right bookkeeper will provide insights. Other bookkeepers handle data entry tasks and don’t take initiative.
A bookkeeper will prepare reports and tell you how you can reduce your tax liabilities.
Bookkeepers are detail-oriented people. They reduce data entry errors and thoroughly review their work to ensure your reports are accurate.
That’s essential when you have to file tax paperwork. Late filings and simple errors can cost your business hundreds in interest and penalties.
A bookkeeper can pay for themselves just by reducing the errors in your financial reports.
4. Improve Cash Flow
Cash flow is one of the biggest challenges for small businesses. Clients pay invoices late, which has a trickle-down effect on the rest of the business.
One missed payment could mean that you have to juggle funds to meet payroll and other vendor payments.
Bookkeepers help you create a system to send invoices on time. They follow up with calls and communications to clients to ensure that payments get made on time.
5. Better Recordkeeping
Any type of financial audit is stressful, whether it’s from a tax authority or a CPA. You have to prove your business if the books are completely accurate.
This is a necessary step if you plan to get outside business financing. A smooth audit depends completely on good records.
Bookkeeping services ensure that your books are accurate and organized. That makes the auditing process smooth and simple.
Organized records are a business owner’s responsibility. Tax agencies and labor departments require that you maintain payroll and financial records for several years.
If anything comes up or questions get asked, you can provide the proper records in a timely fashion.
Tips for Hiring a Bookkeeper
Do you think that your business can benefit from bookkeeping services? You know why it’s important to hire the right bookkeeper that can add a ton of value to your business.
How do you go about finding them? Start with knowing what you need from a bookkeeper. You just might need someone to data entry work. Your business might need the in-depth insights of CFO services.
Once you know what you need, then look for bookkeepers that specialize in your industry. Ask people within your network if they have recommendations.
Interview a few bookkeepers and ask them about their experience and areas of expertise. Learn what services they provide and don’t provide.
Make sure they’re experienced in your bookkeeping software. You’ll be able to find the right fit for your business.
The Key Benefits of Bookkeeping Services
Bookkeeping services have many benefits for your business. You can focus on your business, make better decisions, and make long-term financial plans.
When hiring a bookkeeper, make sure you know what services you need to hire the best one for your business.
Now that you know about hiring a bookkeeper, head over to the Finance section of this site for more financial advice.