10 Reasons you should hire a Bookkeeper
Consider a scenario where your startup is on its way from idea to formal business. There are many, many things to think about and consider. And one of them may just include that all-important decision of when to bring in outside experts to assist you with some of the operational functions that go into running a business.
Those functions almost certainly include the financial aspect of your business. While you may not need -- or want -- an accountant, you could at least consider a bookkeeper to help with the various financial aspects. Your only other alternative is to become a bookkeeper yourself so that you understand every aspect of your business! And that's just not realistic.
So, returning to the bookkeeper option, here are 10 reasons why you should definitely consider hiring one:
1. Keep your focus on core business needs
A startup needs the attention of its founder, including his or her attention to growing the idea into a viable product or service. That means that, as that founder, your time should be devoted to strategy, marketing, funding and other key areas that require your focus over the daily operational tasks of a business.
2. Stay out of what you don’t really know or understand
Not many founders have backgrounds in finance or even a working knowledge of accounts payable, accounts receivable and taxes. It’s better that a professional who took courses and was certified in these areas handle those aspects of the business. That way, mistakes will be less likely, as well as issues that could cost you more money. Remember, if you miss a bill or forget to pay something important, this will significantly impact your business credit.
3. Calibrate a work-life balance
While you could focus on core business needs and handle everything else in your startup, the problem is you’ll have no time left at the end of the day or week for yourself or your loved ones. Therefore, you’ll be missing that balance every person needs in order to stay healthy and not burn out on what you are doing.
4. Get a different perspective on the business
Although you may believe you have a good idea about the state of your startup during the development phase, it helps to have another pair of eyes on this. Your bookkeeper can put the financials in order and run reports showing how you are doing each month, where the funds are going and how your efforts are paying off (or might need improving upon). He or she will give you that "big picture" through the numbers being crunched.
5. Escape the tedious aspects of business
It’s hard to imagine that the financial aspects of your business make you excited. You likely have no passionate feelings about tallying up payroll or writing cheques to pay the bills. However, your bookkeeper may enjoy those tasks, so it makes sense to hand over these areas to someone who does them -- and does them well -- because of that motivation.
6. Make sure everything is paid on time
Between travelling, keeping the startup moving forward, putting out the daily fires that pop up and staying balanced, something most likely gets left out along the way. And that often ends up being the bills that need to get paid. You don’t want your credit impacted by late or forgotten payments, so put a bookkeeper in charge to give you the confidence that everything has been handled on time.
7. Ensure correct tax filings
The last thing you want is to get audited or have the taxman after you just because you forgot those quarterly or annual tax filings. Depending on the type of business structure you’ve created for your startup, you will have various tax requirements, including estimated tax payments, corporate tax payments, correct information provided by subcontractors or freelancers and other filings. It’s ideal to find a bookkeeper who can handle taxes a well as payroll and other financial issues.
8. Maintain cash flow
Because you are so busy, you may not realise that there are outstanding payments from your client base. Any late payments here could infringe upon the cash flow you need to keep your startup humming along. With a bookkeeper working for you, he or she can stay on top of this and send out reminders to make sure your cash flow remains optimal. This will also look good when it’s time to seek another round of funding because you can show positive cash flow you might not have been able to show without that assistance.
9. Resolve conflicts of interest with any business partners
With more than one founding partner, issues could arise where each partner has some idea of how the money should be spent and how to easily access it. Otherwise, conflict could arise that could impede the progress of your startup. That's why a bookkeeper should be the gatekeeper of the money, creating the necessary approval processes that stop partners from just withdrawing money.
10. Reduce the cost of financial obligations
Although you may think you save money by doing everything yourself, the fact is that a professional bookkeeper actually saves you more. That’s because there is a reduced level of risk for human error, lack of knowledge, missed payments and tax obligation due dates and delayed accounts receivable. Plus, your time is money that you could be using toward getting your new business running and bringing in the revenue to move to the next level.
From the time and money savings, to the focus on expertise and greater cash flow, a bookkeeper makes good business sense for your startup.
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