When bookkeeping your small business begins to take more of your time, money and accuracy than it saves, it’s time to upgrade. Most business owners begin their operations with a basic accounting program or spreadsheet and this is fine for a time. However, when the volume of revenue increases, the volume of transactions increases and financial decisions becomes more complex, they become a liability rather than an asset. This blog will take you through five distinct signs that you need a bookkeeper to replace you, and how to do just that.
Is Manual Bookkeeping Taking Too Long and is it Causing Errors?
Yes and if they do, one of the easiest indicators that you need a bookkeeper or more comprehensive system is that they do. Manual data entry, account reconciliation and fixing spreadsheet errors eliminate time needed to run and grow your business. Manual procedures also add the element of human error at each turn and in bookkeeping, human error escalates rapidly into major monetary issues.
Need a tool that can scale when spreadsheet and basic tools don’t? Need something that can scale when what can? spreadsheet and basic tools?
While spreadsheets are suitable for early-stage businesses that have basic needs, they fall short quickly as the number of transactions increases. They need to be manually updated, have no automation and no real-time visibility. One of the most frequent bookkeeping mistakes small businesses make is to stick with basic bookkeeping tools and advance past them because it can seem overwhelming to change.
Is It Becoming Difficult to Track Cash Flow, Expenses, and Profitability Accurately?
When you can’t answer and not just say, “I’m not sure” how much cash your business has on-hand, what the primary cost items are for this month and whether your business is profitable, your bookkeeping system might have a problem. Unclear financial data is not only a hassle, it results in bad financial decisions, lost opportunities, cash flow shortages, and other problems that could have been prevented with a better organization from the outset.
Financial data is a crucial component of your business.
- You’re often surprised by your bank account: if your actual cash position is different from what you think, then you’re definitely not keeping your expense and income tracking in sync.
- There’s no clear line between personal and business expenses. One of the worst bookkeeping mistakes small businesses can make is the mixing of the two; this can cause tax issues, inaccuracies in the profit figures, and a lot of headaches and hassle when it comes to tax time or an audit.
- Profitability reports take days to compile: If it takes hours to manually assemble a report on whether your business is profitable or not, your current system is not working for you and isn’t providing the quick decision-making opportunities that it should.
Is Payroll, Invoicing and Taxation getting more complicated?
They are and the more clients, revenue streams, employees, contractors you add onto your business, the more they will be. When to hire a bookkeeper is usually linked to this when the time of the owner begins to be taken up with the administrative financial tasks. These payroll mistakes, late invoices and chaotic tax records have financial and legal repercussions that impact the business’s position.
Dealing with administrative demands that continue to grow.
When companies grow, they start to deal with several pay rates, benefits, and tax withholdings in payroll. The volume of invoices goes up and the process of collecting becomes more difficult without a system. Invoices are raised and collections become more challenging to handle manually. As the number of deductions, forms and compliance becomes more and more complex, so does tax preparation. All of the above are indicators that you need bookkeeping or expert accounting assistance not due to anything wrong, but because your business has expanded.
Are you not getting timely financial reports to help you make business decisions?
Operating a business is dependent on correct, up to date financial information. In the case of pricing, hiring and investment in growth, if you are making decisions without current financial reports, you are working on information that you lack. This is one of the biggest bookkeeping errors that small businesses commit and one of the more expensive.
Real Time Insights are crucial for growth.
- Reactive decisions: If financial data is weeks old, decision making is reactive – decisions are made on past events not future events.
- When you’re ready to apply for a business loan or outside investment, you need up to date and tidy financials: which is when you need a bookkeeper!
- Year round visibility is crucial with tax planning: When it’s tax season, it’s too late. By then, you could have already missed out on months’ worth of tax planning opportunities that could have helped you trim a considerable amount from your tax bill if you had been careful and planned accordingly.
This is where Epicwayz Advisors comes in. With its expertise in Accounting Services, Tax Services, Fractional CFO Services, and Business Advisory Services tailored for small and growing businesses in this transition phase, Epicwayz Advisors is a trusted business advisory firm in Plano. If you’re looking for a full bookkeeping makeover, the seemingly impracticable payroll or a financial report that is current and actually reliable, Epicwayz Advisors offers a professional bookkeeping environment your business needs to thrive.
Strategic Financial Leadership for Growing Businesses
Get executive level financial guidance
- Cash Flow Forecasting & Budget Planning
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Conclusion
Outgrowing your bookkeeping system is a good problem to have it means your business is growing. If you don’t listen to the warning signs that you need a bookkeeper, it can quickly become financial chaos. If any of these four scenarios ring a bell, then it’s time to seek professional assistance before the cracks get expensive. Epicwayz Advisors is designed with this in mind, to assist small business owners in Plano and surrounding areas with taking the guesswork out of their finances and into a professional, organized, and growth-oriented financial management system.
