If you own a small business, chances are, you know what it’s like to wear a lot of hats. At times you’ve held the roles of sales lead, manager, HR rep, secretary, IT professional, and even stocker. While these all have their downsides, if you’re like 40 percent of small business owners, then the hat you hate most to wear is that of bookkeeper.
A lot of small businesses can’t afford a full-time bookkeeper. Many business owners believe they can complete the basics, like payroll and taxes, on their own, but is that a smart move? Should you outsource a bookkeeper? In order to answer that, it’s important to understand what a bookkeeper actually does for a small business.
Keep track of the basics
The most important bookkeeping task is the daily check of where the business’ money is, where it’s going, and where new money is coming in from. It’s not just enough to just know what these numbers, but rather, you need to know how to put them to use. A few metrics that need to be tracked daily include:
- Liabilities: Anything you owe money for or on, like a loan
- Revenue: All the money coming in
- Expenses: All the money going out for salaries, supplies, rent, etc.
- Assets: Anything your business owns that has value, like a computer or a vehicle
- Sales: The transactions that bring money in
- Accounts receivable: Money your customers owe you
- Taxes: Money you’ve collected on behalf of the state or federal government and remit to them later and money you owe the government on your own profit
Make the basics helpful
Once you’re keeping track of all money flow, it needs to be laid out in a simple manner that explains its movement. A bookkeeper needs to write up:
A cash flow document tracks what’s happening with business money on a daily basis. How much money is coming in and how much money are you sending out? What complicates matters is that these numbers rarely stay stable. Your revenue will vary, especially if you’re fairly new in the market or have a company that experiences high and low seasons.
Your expenses also change. There may be daily expenses, like food or paying a part-time cleaner. There may be weekly expenses, like payroll, rent, or gas. And there may even be one-time surprise expenses like fees for a car accident attorney following an accident with one of the business’s cars. Expenses can be monthly, annually, or non-recurring, and cash flow needs to take all of that into account to ensure that you’re not spending more money than you’re taking in.
A bookkeeper will need to create a balance sheet. This balances assets, equity, and liabilities. This includes absolutely every cent you owe on one side and absolutely every cent you have on the other.
To put it simply, the balance sheet will tell you if your business is turning a profit. It also tells you your equity, or what your company is really worth. Subtract the amount of money you owe from the amount you have and you have your equity.
Should you outsource your bookkeeping?
These are the most basic bookkeeping tasks that need to be done within a business, but if you’re trying to do even these few things on your own on top of all your other responsibilities, it’s easy to lose track. Perhaps the most important thing that hiring a bookkeeper does for a small business is that it gives the business owner time to focus on the big stuff.
Accounting outsourcing companies in USA provide a financially-feasible way to get the bookkeeping skills you need at a cost you can actually afford. This is a great alternative when hiring a full-time bookkeeper is out of reach, as even paying for part-time freelance help can add up to many hundreds of dollars a month.
Bookkeepers play an essential role in the success of a business. Not only do they help businesses save money whenever possible, but they also keep track of the cash flow to point out any glaring financial red flags. Though some businesses can not afford to hire a full-time bookkeeper, many are outsourcing the task to experts through a plan that best fits their needs. Online bookkeeping service subscriptions offer a balance of affordability and access to expertise that is hard for the small business owner to get in any other way.