OK, we have already established that bookkeeping and accounting are often not an entrepreneur’s favorite part of running their business – and that’s all right. But what they miss out on if they don’t keep their books up to date are the tools that can help them make decisions; decisions that will be fueled by the owner’s confidence to grow their small business.
In the payroll services industry, we see it all the time. When the struggle of keeping up with changing rules and regulations are lifted from the shoulders of an entrepreneur, they direct their time and energy to those things that make their business run smoothly and build greater profits. The same is true of bookkeeping.
Besides keeping an eye on cash flow so you have enough money in the bank to pay your bills and make payroll, accurate records and reports like a profit and loss statement can make tracking expenses and receipts into visible patterns so you know exactly where you stand at the moment – and where you can go from there. When you turn reports into tools, you can answer significant questions:
- Is cash flow a problem? Where and when are the biggest strains? Can you make it easier by changing when expenses are being paid during the month? Are invoices going out as services or products are delivered, or at the end of the month? Would adjusting that make a difference on your cash flow? Do receipts get processed quickly and appropriately?
- Can you afford to hire another employee? Yes, everyone is busy all the time. Is your payroll expense increasing because of overtime or additional hours being worked by your part-time staff? Can your business afford the “hidden” expenses of one more employee? Will more workers change your status when it comes to providing benefits?
- Is it time to invest in new equipment? Is the pattern of receipts and income steady and significant enough to justify buying an expensive new piece of equipment? Can your cash flow handle another monthly expense if you finance the purchase? What about additional insurance costs? Are all the expenses that come with the new purchase keeping your assets and liabilities in acceptable ranges?
All these decisions come down to the financial status of your business. If you don’t keep your bookkeeping current and accurate, you can’t make those decisions. And it’s those kind of steps that build your business.
So, back to the original statement I made – I know that many small business owners don’t like to spend their time with bookkeeping – and then analyzing the reports and data they have. So, perhaps the best decision to start is to hire a bookkeeper. Outsourcing means that you don’t have to add to your payroll expense and all the additional costs of an employee.
Our QuickBooks certified expert, Grace Walker, works with many small businesses and keeps them up-to-date. Business owners know exactly where their accounts receivable and accounts payable stand as well as what their cash flow looks like. Financial management is no longer a black hole of unknown numbers, it’s a tool they can use to grow their small business.
Contact The Payroll Department today to start making the move from working with the unknown to feeling confident and making decisions based on real numbers.
-Elaine of The Payroll Department Blog Team