As your business grows, you hire more employees, and you take on more customers, keeping track of expenses and making sure your books are accurate will become harder and more time-consuming. You may be sick of staring at spreadsheets and teaching yourself how to use accounting software — all while you find yourself losing track of records. You might be worried about missing out on important deductions or overdue invoices. You may be thinking about hiring a professional bookkeeper, which can come with a number of benefits.
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Here are some of the reasons why you should hire a professional for all the bookkeeping related to your business.
#1: It Will Save You Time
You can spend hours on bookkeeping and other financial tasks. But because it’s so time-consuming, you always leave it at the bottom of your to-do list. When tax deadlines start creeping up, you end up wasting a lot of valuable time trying to catch up. Any time you spend managing non-core activities (such as bookkeeping) is time you spend away from the growth of your business. But if you hire a professional bookkeeper, the time you would spend on those tasks can be spent on things that are more directly related to your business.
#2: You Won’t Miss Unpaid Invoices
Late and unpaid invoices can put a dent in your cash flow and your long-term business goals. A professional bookkeeper will be able to put a process in place that can help you stay on top of your invoices. Some of them can include the following:
- Sending out reminders if a bill is late.
- Making phone calls.
- Issuing a late fee penalty.
They can also stay on top of late or forgotten payments, so you won’t have to worry about not fulfilling your financial obligations.
#3: You Can Identify Any Cash Flow Issues
Because your bookkeeper will keep daily records of invoices, receipts, and other financial transactions, he or she will have a clear picture of your income and expenses. This can help you understand your business performance and identify any cash flow issues as they come up.
#4: You Can Focus on Growing Your Business
Having a good understanding of your income and expenses each month will help you get a handle on your financial situation. You will also be able to identify spending patterns and sales trends. A tax professional and bookkeeper can help you make better business decisions about your day-to-day operations (such as which time of year is best to make large purchases). You’ll be able to forecast seasonal ups and downs, make sure you have access to capital during slow periods, and avoid taking too much money during the strong months. Having a greater awareness of your spending will help you control and lower your operating expenses whenever it’s possible, which can save you money over the long term.
#5: Tax Season Will Be Smoother
If you hire a bookkeeper from the same company that employs your tax specialist, they can work together to make sure you have an update of your accounting records and return filings. They will also be able to give you an interim or year-end financial statement, which will give you a clearer picture of your business’s financial health (in addition to an advance view of what your tax obligations may be). You can use this information to make decisions that could modify or lower your tax bill.
#6: You’ll Be Better Prepared for an Audit
If your business is audited by the IRS, having accurate and up-to-date records will make sure the process goes smoothly. The sooner you get back to running your business, the better things will be. If you’re concerned about being audited, a professional bookkeeper will be your best defense. Without having good records to support your tax return, non-income items can be taxed as income and legitimate business expenses may not be deducted.
#7: It Will Be Easier to Secure Loans from Banks and Other Creditors
Creditors need to have accurate information about the financial position of your business before they can give you a loan, and having good records will show them that you know every aspect of your company. You’ll have an easier time securing capital when you’re able to outline your past performance, because banks and other lenders need to make sure you have a solid history and a firm grasp of your business’s finances.
If you’re looking for a CPA in Corpus Christi who can help you get a better handle on your business’s bookkeeping, be sure to reach out to Jennings & Hawley.