Signs it’s time to get a bookkeeper on board
By Kitaab
When you start off a business, the founding team plays multiple roles. They become all-rounders doing everything in-house saving the company money and other resources. This does help keep things afloat, however as your company grows, time will be demanded by even more critical tasks that would make the DIY systems you have in place to save costs actually cost you more in the long run. This is particularly true with accounting, doing your accounts in the initial stages yourself when you have the time and only deal with a small number of transactions is feasible. However, with growth in your operations paired with declining time at hand to deal with everyday tasks, accounts could get sidelined and ultimately result in your entire business getting derailed.
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Kitaab provides finance, accounting and tax services for freelancers, start-ups and businesses in the service sector
Learn more1) Short of time
As your business grows, the number of clients, transactions and paperwork grows with it. You’d find yourself struggling to stay on top of day-to-day affairs that you once did, and you’d find your responsibilities grow beyond them.
Once your task list expands, it is critical to understand which one now requires your utmost attention. The rest is to be outsourced to ensure that you spend your time and energy freed up to focus on the core activities of your business.
2) Unaware and not leveraging Tax Deductions
As a business in a particular industry, you may be eligible for several tax breaks. For example, oil and gas sectors businesses have exemptions under VAT. You might miss out on these when you prepare for taxes at the last minute or might not pay attention to these details. Having a knowledgeable bookkeeper would help you keep track of these and thus decrease your overall tax liability.
3) Struggling to maintain a positive Cash Flow
You run on negative cash flow when your expenses exceed your net revenues. This may be attributed to various factors such as unexpected costs, delays in client payments, sluggish periods of work and so on. Creating accurate cash flow statements and knowing where your money comes in from and how it goes out can help you make adjustments and improve your cash flow. A bookkeeper helps you do exactly this helping you stay in the know of your cash flow at all times.
4) Outdated Books
Keeping your books updated and having access to accurate cash flow statements is key to knowing how well your business is performing and how to plan ahead. Without this, running a business would be like shooting in the dark. A bookkeeper can aid you with maintaining books in a timely manner.
What does a bookkeeper bring to the table?
Systematic control over Financial Data
Having a full-time accountant can be out of scope for small firms but in current times, a bookkeeper aided by good accounting software can provide similar support as that of an accountant. A bookkeeper may also collaborate with a part-time accountant to work on the finances of your company to keep it healthy and growing.
Allows Business Owners To Better Use Their Time
A bookkeeper takes over the daily documentation and recording of financial transactions. As a business grows, this task would otherwise take up the important time of a founder that could be invested elsewhere to grow the business. With a bookkeeper on board, you can be assured your numbers are being taken care of while you focus on the bigger picture.
Assits Accounting Activities
An accountant plays a more analytical role than a bookkeeper. An accountant prepares and files returns, at the same time provides advisory of different forms. A bookkeeper on the other hand documents and records financial transactions systematically. This is what an accountant can primarily rely on to perform his role. Thus, having a bookkeeper assists in accounting and decision-making in general.
Assits In Running Your Business With Ease
As mentioned above, the work done by a bookkeeper enables accountants to perform their tasks and thus enable carrying out business decision-making based on facts and figures. Without a proper system to track transactions, it would be impossible to run and grow a business successfully.
Helping You Know Your Business’s Performance
A bookkeeper handles day to day financial operations of your firm. They know how your business is doing. They know how it did in the past, how it is doing and how it will do in the future. If done systematically and meticulously, the information they provide lets you have a clear picture of how your business is functioning and plan accordingly. For instance, they can help you improve cash flows based on the performances of certain product lines or locations.
They can also help with the paperwork required to take out loans or for expanding your business to new locations.
Cost Savings For Your Business
When you keep track of deadlines and payment timelines, you not only save yourself from penalties but you could also be rewarded. For example, payments made on time to suppliers will build good relations and can get you discounts. In order to make timely payments and not miss out on deadlines for taxes etc, you need to keep track of all the payments received and those to be made along with their schedules. This is what a bookkeeper can do for you and that’s how you’d save money.