Many small business owners start out by doing everything for themselves. This often includes marketing, logistics, customer service, sales, and bookkeeping. Unfortunately, handling the financials yourself can be risky business. Poor money management is one of the top reasons why small businesses do not succeed. That’s why it’s so important to hire a professional bookkeeper to handle your finances. They not only love working with numbers, but can also help your business grow. Still not convinced that you need the help? Take a look at these five reasons why you should hire an outside bookkeeper.
Being your own boss is not typically a 40-hour workweek. If you’re like most small business owners, you probably put in at least 50 hours or more a week, and that doesn’t even include the time you spend thinking about everything after hours. The best way to maintain some form of work-life balance is to free up your time by delegating some of your duties. One of the most time-consuming is bookkeeping. This is where a professional bookkeeper can take the weight off your shoulders. The time you would spend stressing over your financials can now be spent with your family or pursuing passions outside of your work. You might even be able to sneak in a vacation every now and then.
Do you know how to generate a profit and loss statement? Are you passionate about crunching numbers? If the answer is no, you should probably hire someone else to help with your financials. An expert bookkeeper will have a working knowledge of accounts payable, accounts receivable, and taxes. They’ve also seen just about everything, so no matter how unorganized your books are, they’ll get them straightened out ASAP. Another bonus – fewer mistakes. A professional bookkeeper is less likely to make an accounting error or forget to send off payroll taxes, which could cost you dearly.
An outside bookkeeper can give you a fresh perspective not only on the financial health of your business, but also in other areas. For example, many small business owners start as sole proprietors. Although this is the simplest option, it’s not necessarily the best fit for your business. A professional bookkeeper can explain the different legal structures, provide feedback on their pros and cons, and help you find the perfect entity for your business. They can also identify trends and patterns, helping you to decrease costs and increase profit margins.
Depending on the type of business entity you’ve established, there will be various tax requirements. This may include submitting 1099s for contract workers, withholding and paying payroll taxes, quarterly tax payments, and annual tax filings – just to name a few. Using an outsourced bookkeeper can make this process a breeze because your financial records will be in order and accurate. In some cases, the bookkeeping service may even handle all the necessary tax filings for you.
Are you at the point where handling your company’s financials is taking up too much of your time? Before you decide to hire an in-house bookkeeper, be sure you consider all the costs. You not only have to cover their salary, but also federal taxes, unemployment taxes (state and federal), workers compensation, and benefits (PTO, sick leave, medical, etc.). On average, a full-time bookkeeper makes $43,748 (as of July 28, 2020), which comes out to around $3,646 per month. An outside bookkeeper, however, is much more affordable. Depending on the size of your business, fees typically range between $99 and $2500 a month.
At Tax Defense Network, we offer affordable bookkeeping bundles for small business owners. Many include tax preparation and filing services, as well. We can even prepare a profit and loss statement for a low, one-time fee. To learn more about our professional bookkeeping services, visit our website today!