Why Does Your Small Business Need a Bookkeeper?

July 17, 2017 by Ed Becker

Would you perform surgery on yourself?  In the same vein, you would probably not replace a roof or furnace in your home, unless you were a roofer or HVAC professional?

It would then most likely follow that you would not risk trying to keep your own business’s books, if you are not a professional bookkeeper or accountant? Your money and business records are in some ways as important as your health, and your home being safe and warm. If you are not a professional, it is probably too risky to DIY your bookkeeping.

Yes, there are lots of programs like QuickBooks and the like, or apps to help you keep track of your financial business records. But apps are not intended to replace your actual books.  QuickBooks can be daunting for someone that is not knowledgeable about accounting or bookkeeping. Bookkeeping and accounting are not minor issue that you can risk winging it on your own. Maybe when you first started your business, you could keep up, and muddle your way through. But once you are “in business”, you should be doing the tasks that keep you in business, the reason you started which is to execute your business plan and make money.  Do delegate the professional tasks to the appropriate professionals.

Your bookkeeping must be spot on, not only for tax purposes, and your CPA’s sanity, but for your business’s sake. Can you honestly say that if you needed to pull up reports or financial statements for the last 5 years that you could do that and be confident that they are accurate? This is what you would need for investors, or lenders…full financial statements and profit & loss reports, as well as, some reports that you may not even know how to formulate.

Back to the topic of tax purposes, have you ever been audited?  It is vital to properly provide the documentation that you would need if you were selected for an audit? Even if it never comes to that extreme, if there is a tax issue no matter how minor, you need documentation to remedy it.

A recent statistic showed that 74% of small business owners did not employ a professional bookkeeper, either part or full time. This could be extremely costly for these businesses, if something is recorded incorrectly, or not at all, because you may not be completely trained for the task.

Even if your bookkeeper is not an employee, but an outsourced professional, at least you are safeguarding your business from possible financial disaster. This simply is not an area that can be ignored or dabbled with, if you value your business. It really is that important.

Small business owners wear many hats every day, and most do it very well. But some hats should be worn only by those who have specialized, professional training. Just as in the examples of the roofer, HVAC or surgeon mentioned above. Those are not tasks that you would take on yourself because they require a certain set of skills and training to be done properly.

Cutting costs is always something you want to practice in business and personal finances. However, in business there are some things that cutting costs is not worth the trade-off of a catastrophic financial error. Financial errors can potentially put you out of business. Best rule of thumb: know your strengths and where you work best to make money, delegate the professional tasks to the professionals to avoid costly mistakes.