Signs You Need to Hire a Bookkeeper in 2023

As a small business owner, managing the books yourself might seem like a way to save money. However, as your business grows, so do your finances and DIY bookkeeping might not be attainable.

Perhaps managing your finances doesn’t excite you, or maybe you don’t have the time or proper knowledge for it. If that’s the case, it might be time for you to hire a bookkeeper.

A bookkeeper handles the day-to-day finances of your business, including:

• Recording and organizing sales, invoices, purchases, bills, receipts, and other business transactions

• Producing accurate financial reports, such as financial statements and balance sheets

• Explaining your finances in a way that makes sense for you

• Designing, updating, and auditing your business processes

• Recommending accounting software programs and other solutions to help you run your business better

By hiring a bookkeeper, you can dedicate more of your time to your area of expertise without having to worry about the state of the bookkeeping. Need more convincing? Here’s 6 reasons you should hire a bookkeeper in 2023.

Unpredictable Cash Flow

Staying on top of your cash flow is essential to ensure your business is profitable, especially as a small business. If your cash flow is unpredictable and you’re not keeping tabs, you might run into problems like not being able to cover business expenses. Your cash flow should determine how your business operates. If you’re not bringing in enough money, you might have to restructure your business to accommodate.

A bookkeeper will help your small business keep an eye on its cash flow by tracking accounts payable and accounts receivable, and following up on overdue invoices when needed.

Your Books Are Outdated

Keeping track of your monthly transactions is vital to your business and can make the difference between:

• Knowing whether you can pay your employees and contractors for the month

• Getting approved or denied for a business loan or line of credit

• Bringing on investors or partners for your venture

When your books are outdated, you don’t have an accurate picture of your financial status. The longer you go without tracking, the more difficult it will be to organize your transactions and manage your cash flow. You may also be misled if you think your business is more profitable than it actually is.

When tax season comes around, you’ll need to provide proof of every transaction, and the last thing you want is to be scrambling at the last minute to update your books. A bookkeeper will keep track of your transactions for you, so that you’ll be fully prepared when tax time comes.

You’re Missing Out on Tax Deductions

If you’re not an expert at doing taxes then you might be missing out on tax-deductible business expenses. These deductions can be used to offset your total business income and reduce the amount of taxes you owe, but only if you record them properly.

A bookkeeper will keep track of all your transactions and assign them to the right expense category. By hiring a bookkeeper, you’ll also have someone who has a better understanding of which tax deductions your business qualifies for, and may identify business expenses you didn’t even know were tax-deductible.

You Don’t Have Enough Time

We understand that business owners often wear many hats, and sometimes there isn’t enough time to properly manage the books. That’s ok, and it’s just one more reason you should consider hiring a bookkeeper.

As your business grows, so do your responsibilities and tasks. Knowing where to dedicate your time is a valuable skill as a business owner, and outsourcing others who are more qualified, such as a bookkeeper, allows you to devote your attention elsewhere.

You’re Not Confident in Your Bookkeeping Skills

With that being said, you also might not have the qualifications to be a bookkeeper. You can’t be an expert at everything, and we’re here to help. When it comes to your business finances, a certain level of expertise is required. If you’re unsure of what you’re doing then you may encounter errors in your bookkeeping, which will sneak up on you come tax time.

Hiring a bookkeeper will take the guesswork out of your bookkeeping and will ensure your transactions and records are accurately tracked.

Your Accountant Does Your Bookkeeping

It’s important to know that bookkeeping and accounting are not the same thing. Bookkeepers record financial transactions, while accountants analyze and interpret financial data. If you’re not regularly updating your books, you’ll have to ask your accountant to organize all your financial information ahead of tax season, which is a timely process that could be avoided by hiring a bookkeeper.