Is your small business ready for a bookkeeper? Here are five signs that your financials have grown too complicated or time-consuming for your existing team (which may just be you).

By FINSYNC

Small business owners pride themselves on minimizing costs and bootstrapping their way to success, often by taking on many of the business roles themselves. If you often wear the hats of the CFO, CMO, COO and a number of other positions, you know exactly what we’re talking about.

However, at some point your organization will likely get too big for you and your team to handle everything. When it comes to managing your books, knowing the right time to hire a bookkeeper can go a long way towards the future financial success of your business. While it can be stressful as you grow and bring in more help, failing to do so could end up costing you a lot more in the long run.

Is it time for your small business to hire a bookkeeper? Here are five signs you should look for to determine if the timing is right: 

Spending Too Much Time on Bookkeeping

If you’re still handling all of the bookkeeping yourself, it can quickly start to take up a large portion of your time. Not sure? Use a time tracking app to determine exactly how much time you and other employees are spending on bookkeeping. This is time being pulled away from other tasks that are critical to your business success.

Your time is more valuable than the cost of a professional bookkeeper. Once you get to the point where a significant percent of your time is spent on an easily delegated task — delegate it.

Your Books Are Behind

Unfortunately, many small businesses fall into a hole where nobody is regularly maintaining the books. This may result in your bookkeeping being months or even an entire year behind. The consequences and symptoms are significant for your company:

  • Unclear Profit Margins
    If you don’t know how much money you’re making or spending, you aren’t able to make important decisions about the direction of your business. Many companies see their revenue increase but their profits stay the same because they’re unable to properly analyze and manage their profit margins.

  • Unpredictable Cash Flow
    Not having a full awareness of your profits and losses makes it difficult to accurately predict cash flow. This makes it more likely that you could miss payroll or fail to pay vendors on time.

  • Trouble with Collections
    A professional bookkeeper can keep an eye on your accounts receivable to make sure you’re getting paid on time. If you’re behind on your books, you could go months without realizing that an invoice is overdue.

Taxes are Becoming More Work

Several clear symptoms of mismanaged financials or outdated books come about when tax season rolls around. Ideally, you should be able to hand over the year’s financials to your accountant, immediately file your taxes, and receive your refund.

Without a bookkeeper, your taxes may require much more work. You’re likely to find yourself working a lot more with your accountant to piece together a year’s worth of books in order to get enough information together to file. Paying estimated taxes can also become impossible when you don’t have an up-to-date view of your quarterly financials.

Limited Ability to Make High-Level Business Decisions

As a business owner, you must be able to make decisions to help grow your company and move it forward. Without a complete, updated view of your company’s financial health, you may be forced to act blindly. On the other hand, if you’re spending all of your time keeping your books up-to-date, you’re limiting your ability to spend time on big picture decision making.

A bookkeeper can free up your time while providing you the insights necessary to make informed decisions that help your business grow.

Budget-Friendly Bookkeeping

Are you in the habit of handing all of your expense reports and invoices to your accountant at the end of the year so they can manage your books? You may be spending more than necessary for bookkeeping. CPAs will generally charge much more for bookkeeping services than you would pay a professional bookkeeper.

Luckily, it’s not difficult to find an affordable bookkeeper — or accountant — that fits your business needs. If your company isn’t ready to hire a full-time employee to handle your books, consider hiring a freelance financial professional. FINSYNC’s Virtual Assistance Network pairs you with a qualified and vetted bookkeeper that suits your business’ needs. If you’ve seen any of the above signs in your business, it may be time to take a look.