Reasons to Outsource Your Business Bookkeeping

Many small business owners only keep books because they have to in order to file taxes. It’s the least favorite part of running their business and gives them a bad feeling in the pit of their stomach every time they think of having to do it. By outsourcing the Bookkeeping and Accounting Services of your business you can save time, save money, better grow your business and have better overall mental and physical health. 

Here are the reasons it makes sense to outsource your bookkeeping and accounting services:

1) It saves you time: Time is something you cannot get back. Poor time management is one of the biggest reasons, if not the biggest reason, that most small business owners fail. Your job as a small business owner is to promote and grow your business and assess the results of your efforts on a regular basis, not bookkeeping.

2) It saves you money: How does spending money on outsourcing my bookkeeping save me money you might ask? The answer is based on the value of your time which is not an arbitrary figure. If you’re a sole proprietor, a quick and easy way to come with an hourly value of your time is to divide your average monthly sales revenue by the number of hours you work an average each month. If you generate $10,000 a month in sales and work 200 hours a month, your hourly figure is $50. If you have employees that generate sales you’ll have to assess what influence you can have on increasing their sales if you apply the time you normally spend on bookkeeping on coaching and motivating your team. Each business situation is different but understanding what your time is worth is essential for many reasons. The point here is that to grow your business your time should be spent on that which you do well and is essential to managing your business. You can generally have your books done for less than what you actually cost yourself, and for far less than the value of the time you take away from growing your business.

3) It gets done accurately: If you are not a trained bookkeeper or accountant you perhaps are not looking at an accurate profit and loss statement or balance sheet when you’re done. And, there’s no one around to point that out. This can hurt you in many ways. Not the least of which is through over payment of taxes. If you keep books throughout the year and turn that information over to a CPA at tax time, they typically are not going to go through an entire year of data entry to make sure your expenses are all categorized correctly. They are simply going to prepare a return based on what you give them. If your CPA does go through and review your data entry, you perhaps will pay them significantly more.

4) It will help you grow your business: If you have never been taught or trained on how to assess and analyze your financials you may not know how to best to use them to make important decisions about the direction of your business. As an example, a photographer may focus on taking pictures of animals. Because people are nuts over their animals this niche will surely increase revenue. And it does. Yet the effort of marketing and time spent in photo shoots trying to get dogs and cats to take a good picture is more than doing head shots of people. Therefore this effort produces less profit per client. The adjustment then is to spend more time promoting the head shot part of the business. If you choose the right bookkeeper or accountant, they can coach you on how to analyze your financials to better manage and grow your business.

5) It gets done: You alleviate yourself from having to look at the piles. Simply looking at piles of unfinished work that you know must get done when you have a dozen other projects to accomplish is stressful. Stress is unhealthy and one thing you need to have as a small business owner is good health. Without it, you’re out of business.

Here’s a tip- instead of spending the hours this month that you normally would on keeping your books, take that time to find a qualified, local bookkeeper or accountant that you like and get rid of the ever growing piles of receipts. Then you’ll be more free to focus on what you like to do, what you’re good at, and what is essential to making your business grow.