4 Things You Should Consider Before You Tackle Your Own Bookkeeping
Millions of businesses have taken on the task of their own bookkeeping. While there are many advantages to taking on your bookkeeping, there are also many disadvantages, such as mistakes that may go unfound until it is too late. So many different details go into the financial side of your business, and a lot of these details can be easily overlooked or missed if you are not sure what it is that you are looking for. When you are weighing your options, there are a few things to take into consideration before coming to a conclusion.
Bookkeeping takes time.
While many skills go into bookkeeping, there is also a lot of time that goes into it as well. You have likely thought of the time it will take for you to learn how to manage your books, but what about the time it will take you actually to do your books each month. Bookkeeping can take a lot of time out of the day, especially if you are usually busy with other tasks and tending to your business all day.
Many business owners see a shift in responsibility and begin to delegate other tasks to others so that they can stay on top of the transactions of the business. However, it’s not always easy to let go of other tasks and start delegating. If you choose to keep everything on your own do-to list, then you might find yourself getting distracted by other daily tasks while you are trying to focus on your books which can lead to mistakes or other neglected tasks.
Keeping up with regulations.
Bookkeepers and accountants have been trained on state and federal regulations, and they are always changing. Keeping up with the most current regulations can be difficult if you don’t know what you are watching for. Non-compliance can end up being time-consuming and costly for your business.
As a business owner, it is not just the financial regulations you need to pay attention to before taking on your own books, therefore you should ask yourself if you are ready for the commitment of staying up to date on the financial regulations and how they apply to your business.
Developing an organizational system.
While organizational and management systems are essential to run a successful business, financial professionals take it to a whole different level. When taking on your business’s bookkeeping you will also be in charge of keeping track of financial statements, receipts, and daily transactions.
Keeping your books organized can prove to be vital in case of an audit. Messy bookkeeping can again lead to time-consuming and costly consequences. Many professional bookkeepers already have an organizational system in place that they can use for your business.
You may still need professional help.
Even if you are staying on top of your own bookkeeping, you will likely still come across different situations that you are not sure how to handle. In those cases, it will be best for you to ask a professional that has experience in bookkeeping and accounting. Most the time, businesses bring their bookkeeping in-house to save money, but if you are still spending money to ask questions, AND you are spending the time to do your bookkeeping you will need to ask yourself how much this is actually saving your business.
The level of commitment you put into learning the financial side of your business will determine how much you spend on asking a professional a few routine questions. Many business owners think it is a great idea, but at the end of the day, business owners are busy. You may find it harder than you think to find the time to learn how to manage your own books.
Making the Best Decision
As a business owner, it is crucial to make the best decisions for the business continually. You should weigh all of the possible outcomes of you working on the business’s books, while also thinking about what kind of value a professional bookkeeper can bring to your business. Many business owners overlook a few of the details regarding their business’s books. Before you decide to work on your own books, you should always consider the different aspects that go into bookkeeping.
Making sure you are fully prepared to take on the responsibility of your business’s books will set you up for a higher chance of success. Business owners should always consider the time commitment that goes into bookkeeping and asks themselves if their time will be better spent on other aspects of the business. If that answer leans toward a yes, it is a good idea to look into hiring a professional. Hiring a professional can add value to your business and let you have more time to focus on improving and moving the business forward, rather than tracking it.