Bookkeeping is such an important part of your business. It provides you with vital information that you need in order to grow your business. However, is doing the bookkeeping yourself really the best use of your time? As a business owner, you need to spend your time growing your business, taking care of your client and focusing on the future of the company.One big factor that many people forget to consider is if they have the knowledge to even do the bookkeeping in the first place. Bookkeeping is more than just income and expenses. You may have prepayments; you may have a loan or a business credit card which all have to be handled slightly differently. It is not just a case of recording income and expenses – there is more to it. For example, your credit card account needs to be listed as a current liability; it is not an expense on the Profit and Loss Statement. I have seen people recording expenses twice – once as they pay the credit card and once as they recorded the receipts for the charges on the credit card. The effect of this is that you are showing less profit than you are actually making. If you have a business loan it is so important that you record the payment correctly broken down to the principal and the interest and that the loan is recorded as a liability on your balance sheet. It is these little details that can have a big impact on your financial statements if the transactions are not recorded correctly.
Another aspect to consider is the accounting software that you would use to record your bookkeeping. QuickBooks is a great piece of software that we use here at Abacus Bookkeeping; however, you need to know how to use it in order to get the most out of it. The information that you get out of it is only as good as the information that you put into it!
Then of course you have to look at the cost of your time if you did the bookkeeping as opposed to the cost of hiring a bookkeeper to do it for you. A Professional Bookkeeper will have the software, the knowledge and the time to do the work for you and when you consider your time factor into this it will be cheaper to hire someone to do this for you! Plus a lot less stress on your shoulders!!!
Take a few minutes today to consider how long it takes you to do your bookkeeping each month and multiply the number of hours by your hourly rate – that is how much it costs to do your bookkeeping each month. Maybe you are not doing your bookkeeping at all and you need to consider hiring someone to get it set up and kept up to date so that you know the financial health of your company.
Bookkeeping is so important – please do not ignore it! We love working with our clients and keeping their bookkeeping up to date so that they can focus on their business.