A significant number of people don’t think paying for outside bookkeeping services is worth the money. This post is not meant to “toot our own horn” so to speak, but rather to inform why paying for bookkeeping can be very valuable, especially, if the outside party providing the services knows accounting and the tax laws.
By hiring someone qualified it guarantees your books and records are in good hands with goals of maximum efficiency, high quality, and a high level of service in mind. What do we mean by all this? Your books will be reconciled with your bank accounts on a regular basis, payroll will be recorded correctly, and all the various transactions that take place in your business likely on a daily basis will be put in the proper asset, liability, equity, expense, or income accounts. By having all those items properly recorded it also allows the same qualified party to provide valuable financial analysis and recommendations that could bring a significant, positive impact on your business. They can tell you where your business should consider increasing spending to increase sales or where it should decrease spending because the cost-benefit ratio is too low. For tax purposes they might be able to tell you things you didn’t know were deductible, what isn’t deductible, and what areas might raise red flags for a potential audit.
Lastly, you should consider what is potentially being lost by having the owner or an employee within your company who isn’t really qualified to be taking care of the bookkeeping and the amount of time they are spending attempting to do so. For example, if you have a sales representative within your company who spends ten hours per week attempting to do your bookkeeping that you pay $15 per hour, but when they are doing direct and indirect selling instead they generally make you five times their wages, which is more beneficial?
These are all things a business needs to think about because when it comes to financial matters, having them in good order can be crucial to success.