How Bookkeeping Can Lower the Cost of Running Your Business
Owning a business and operating a business are not the same thing. Sure, your name may be on the business registration form, and you may be the one to whom employees report, however, your business cannot succeed without effective bookkeeping know-how. Even if you have plentiful capital at your disposal or if you have hundreds of customers, this holds true. It’s especially true if you aim to handle the financial aspects of your business on your own.
Bookkeeping skills are crucial for every business owner. But, it’s important to know when to ask for professional help. This is not to say that you have to employ an accountant or bookkeeper to work for you in-house; rather, you can opt to have your bookkeeping services outsourced instead.
An external bookkeeper can provide you with an impartial view and analysis as to the actual state of your business’ finances, whereas an internal bookkeeper’s unintentional emotional attachment to your firm’s daily operations might skew their data. An external bookkeeper’s performance and results will not be clouded by emotional affinity as they are totally unaffiliated with your business. The objective is merely to describe your financial problems as they really are, not to provide you with consolation or false hopes.
A bookkeeping service’s impartiality and independence would certainly be advantageous in sensitive kinds of businesses. For example, partnerships where assigning accounting duties to one of the owners can be delicate. Business relationships are at stake and allegations of falsification, omission, or negligence could break these ties even if the errors related to the keeping of records are accidental.
In that type of situation, an owner might be faced with deciding between his or her best interests and those of the company. Even a whiff of impropriety can cast doubt on a business and its employees if a financial decision produces an outcome that seems to favor the person making the decisions. Enlisting a third-party bookkeeping service prevents this type of situation and yields balance sheets that can be trusted by all of the business’ owners.
If you are searching for an external bookkeeping service, pick one that has accounting and auditing experience relevant to the type of your business. External bookkeepers are usually individual clerks who carry out financial inspections and assessments of company ledgers. The ideal external bookkeeper is someone who specializes in working with companies that share characteristics with yours but who still has a solid grasp of the basic financial processes and methods. The service should also be able to come up with fast and accurate figures concerning your business’ profits, losses, and turnover that can provide you with an important overview as to how your company is performing.
Being conscious of the costs incurred by your business is imperative. Since lower costs mean more profit, your goal as a business owner is to keep costs down as much as possible. Directly employing fewer people is a common way to do this. You would have to fork out money to pay for the salary and benefits of an in-house bookkeeper, so you or one of your fellow business owners might consider collecting and recording the bills, payments, sales, etc. yourself. Then you can pass this information and documents to an external bookkeeper to be subjected to accounting. That way, you’re only obligated to pay for the bookkeeper’s services every time you ask them to do accounting work. This is significantly more economical than paying for a full-time accountant employee’s monthly salary and benefits.
Totally Booked offers bookkeeping by QuickBooks Certified ProAdvisors based out of NYC. Get in touch today to see how we can help!