I trust you made it through another tax season. There is always a collective sigh of relief – and it’s not just the accounting firm employees – it’s the small business owners, too.
You could make life easier on yourself – and them, if the truth be known – by making this the year that you hire a bookkeeper.
You don’t have to put a bookkeeper on the payroll. You can outsource bookkeeping, just like you outsource payroll. Most small business owners start with their first bookkeeper as a contracted worker. Payroll isn’t all we do here at The Payroll Department. We heard the cries of our clients at tax times so we are now offering bookkeeping services. Our resident expert in QuickBooks, Grace Walker, is available to keep your business books in order.
There are many reasons to hire a bookkeeper, and all of them make the end of the year tax time easier!
Empty those boxes of scraps of paper and receipts
The box method of bookkeeping drives everyone nuts. You know that’s the truth. A bookkeeper prevents you from falling into the box method. A bookkeeper will reconcile your accounts at the end of each month. That means you can avoid trying to figure out what that $49.86 check you wrote in February was for because it will be entered into the books shortly after the transaction is made. Tracking expenses is critical for your small business. Having someone help means you save space in your head, frustration, and the fear that you are losing out on write-offs simply because you don’t remember. Plus – and this is a big one – should you ever be audited, the records will be complete. There is lots of peace of mind that comes in the door every time your bookkeeper walks in.
Making good financial decisions throughout the year
Knowing where your business stands financially makes it possible to make major decisions for your business. That doesn’t mean only what the balance is in the bank account, but also the status of your assets, your income stream rates and your expenses; current, pending and future. It’s a lot to know and without accurate and current records, it’s just not possible. That’s why a bookkeeper is so important. He concentrates on keeping your day-to-day operations recorded so you can see where you are – and what is coming. A bookkeeping professional will help you remember to set aside 20% for those quarterly tax deposits so you don’t get whammed when you remember it’s due. He will remind you of open transactions, bills and invoices that have to be paid.
Save money on the year-end accounting bill
If you do your own bookkeeping, you try your best. But, like we hear all the time, a little bit of knowledge can be a dangerous thing. If you aren’t well versed in accounting practices, and current law, you could be making mistakes. And mistakes can be costly. It isn’t just in losing out on write-offs, it could be in the time that the professionals have to spend fixing your errors. Bookkeepers keep your accounts in order so that your accountant isn’t racking up billable hours re-organizing all the debits and credits you thought you were doing right throughout the year. If you were born to be an entrepreneur, be an entrepreneur, and leave the bookkeeping to the people born to be bookkeepers!
Stay on top of payroll tax reporting and remittances
Bookkeepers keep you organized for sure, especially for payroll: making sure that all the wages, perks, benefits, insurance, etc., are accurately accounted for and then reported on the W-2s or 1099s to employees and the government on time. (Unless you have a payroll service like The Payroll Department that will make sure your records are accurate (the audit regularly) and then prepare the deposits and reporting documents for you.)
Control cash transactions
Cash may be king, but cash transactions are a challenge, especially for small business owners without bookkeepers. Where does the cash come from and where does it go? You can’t keep those sorts of transactions buried in your brain all year and then expect to remember each and every one when it comes time for filing your taxes. A quick note to the bookkeeper means she will dog you until the transactions are included in your books. Every penny can make a difference in the tax bill at the end of the year. Don’t cheat yourself out of savings with poor recordkeeping.
Monitor accounts receivable
Keep track of the accounts receivable so you can make efforts to collect before a) it is a major problem for you, and b) the end of the year when everyone is asking for and needing money. Knowing how far behind a client truly is helps you make solid decisions about that account. Their situation impacts your small business and not always in a positive way. You need to know that.
There are so many aspects of being a small business owner that you have to be on top of every day. We hear all the time that it is the decision to outsource those responsibilities and duties that are not really in the owner’s wheelhouse that drives real growth for businesses. Freeing up your time and energy to put your efforts into building and developing your small business is arguably the biggest perk of outsourcing.
Let The Payroll Department help you focus your energies on building your business this year – we are here to serve! Contact us today at 317-852-2568 or online. Just the thought of taxes and tax time is stressful enough – let’s alleviate some of the worry!
-Elaine of The Payroll Department Blog Team