At the start of owning a business, money can be tight. Even if your financials are in good shape, it can be tempting to wear as many hats within your company as possible to cut costs. However, when it comes to bookkeeping, the investment is always worth it. Unless you are a professional accountant, having someone on your team who understands the ins and outs of bookkeeping is essential. Need more proof? FinTechFreedom shares the five reasons every new small business owner should hire an experienced bookkeeper.
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Stay focused on your business
The duties involved with bookkeeping are extensive and time-consuming. Between entering every financial transaction that your business makes to calculating payroll, the hours add up.
If you’ve been handling these tasks up to this point, you are well aware of how much they can distract you away from your core duties. Rather than focusing on the business itself, you have to allocate enough hours for bookkeeping tasks. As a result, some of the most critical accounting duties may not be getting done properly (or at all). Having an on-staff or contract accountant will ensure that your financials are being handled in real-time—at all times.
Find every tax advantage
Accountants who specialize in small business bookkeeping are well-versed in the top tax breaks that can help your business save thousands. One such advantage that many new small business owners are unaware of is available when you form a limited liability company (LLC).
This single move can provide you with additional startup deductions, and it can also benefit your business for the long term when filing your state and federal taxes. Experienced professional accountants are able to advise on strategies like this, which can save you big time.
Keep consistent and accurate records from the start
Having detailed and accurate financial records is crucial for a number of reasons. For example, if you face an audit at some point, the process will be far easier if you’ve had a professional accountant maintaining your books. Being able to back up every number is crucial for a smooth audit that does not result in extra work and stress. Additionally, if you need to retrieve a transaction for any reason (e.g. refund request, verification of a specific purchase, etc.), you will be able to do so when you’ve maintained consistent and accurate records from the beginning.
Along the same lines, preparing and maintaining clear and explicit customer contracts are necessary to ensure timely payment for products and services rendered. These contracts also exist to protect both parties by defining each party’s responsibilities to the other. Among other things, when writing a contract, be sure to include the parties involved, the start and end dates, and the payment terms.
Better approval odds when applying for business loans
Planning to apply for a business loan to fund a major purchase? As a new business owner, getting approved for a loan (especially a more sizable one) can feel almost impossible. Having a bookkeeper as part of your team can increase your approval odds in a number of ways. Your accountant will be able to provide you with detailed, professionally created financial documents that are requested during the application process. When equipped with the right documents—especially ones that can prove your financial stability—lenders will see you as a lower risk.
Easier to make smart buying decisions for your business
One of the more important reasons to hire an accountant for your bookkeeping needs is to have an accurate idea of what you can afford at all times. Rather than making the best guesses, your accountant will be able to provide you with up-to-date figures that can inform your decisions. You can invest in smart tools like software with a bank account balance API integration. This will provide you with realtime banking information so you’ll never be caught out on available funds.
While it is certainly important to be diligent in minimizing costs when launching a new business, hiring a bookkeeper is always a wise move. Oftentimes, you’ll end up saving more in the long run (e.g. tax deductions) than you would handling accounting tasks on your own.
FinTechFreedom is here to give you a roadmap and step-by-step process in order to put your personal finances on the path to financial freedom. For more information, please visit our website or contact us today!