If you’re like many startups and small businesses, you stay busy running your company and handling the day-to-day issues and tasks. Bookkeeping often gets pushed to the back of your to-do list until you’re frantically trying to find all your paperwork for tax time. If you’ve never thought about outsourcing your book-keeping, here are a few reasons to consider it.
File an Accurate Tax Return
One of the main reasons to hire book-keeping services or an accountant is so you are better organized and prepared for tax season. You don’t want to wait until the last minute to get everything together and file your taxes. If you are ever audited, you will need to prove everything listed on your tax return. Proper documentation is the key to a successful audit.
Hiring out your bookkeeping for taxes has a benefit for your business as well. An experienced accountant may be able to find more deductions and credits based on your books than what you would have if you don’t have accurate documentation. Any tax benefits you can get will help your business in the long run. At the same time, a bookkeeper will know how to record everything to ensure that your return is accurate.
Obtain Loans
As your business grows, you may need to get a loan for expansion. Lenders are going to want to see that your business is a success. The only way you can prove it is through well-kept books that document your expenses and income over a time period.
Most lenders will ask for a profit and loss statement and balance sheet to consider your request for a loan. You will need to have all of your receipts recorded for these documents to tell an accurate story of your business. For a small company, it can be difficult to keep up with these details on a daily basis. If you outsource your bookkeeping, they can ensure you have a record of all transactions and the correct documents if you should need to provide them to a lender. Whether you need to look back two, five or even ten years, you can show that you are organized and your business is growing by providing the right documentation.
Review Your Business Success
You need to keep accurate books to know how your business is performing. You should compare last quarter’s numbers with this quarter or last year with what is going on this year. The only way you can get accurate information is if everything has been entered in your bookkeeping program or documents.
Not only does this information help you know how well the business is doing, it lets you prepare for what is coming. You can learn to recognize busy and slow times for your business by looking at past records. This enables you to keep up with cash flow so you never have to worry about paying your expenses or having enough inventory on hand. You can also see if you have grown from previous years and at what rate so you can predict what will happen in the next year or two.
With the various bookkeeping software programs available, you may wonder why you would need to hire a bookkeeping service. It’s important to understand where and how to record your transactions. If you don’t have a background in accounting or bookkeeping, you may fail to record your information correctly. It can get lost or even worse, make your data inaccurate. Sometimes the error can be as simple as posting a transaction to the wrong account. If you don’t understand the process, it can lead to serious problems in the future.
Free Up Your Time
Perhaps the most important reason to outsource your book-keeping and hire a competent book-keeping service is because of the time it saves you. Instead of spending time on your books, you can be focused on other core aspects of running your company. You can develop your business and help it grow as you let professionals handle the accounting aspects of your company.
Consider all these reasons to outsource your book-keeping so you can build your business. While book-keeping may not be the most exciting aspect of your company, it is one of the most essential and should never be taken for granted.
