You Have Unpredictable Cash Flow:
Are you ever unable to pay your business expenses in certain months due to a lack of cash?
While many factors can cause this scenario—like insufficient client work, large unforeseen expenses, and late payments from clients—the bottom line is that your expenses have surpassed your income. You have a cash flow problem.
And not keeping tabs on your cash flow is a huge issue. Think of it as steering a ship with no map and no way to navigate. You become vulnerable to the smallest changes around you because you’re unable to catch them in time.
Your books are always out of date:
It is important to keep track of your monthly transactions.
Updated and accurate books can often mean 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
- Knowing if you can sell your business when an opportunity arises
When your books are outdated, you never really have a firm handle on your finances. Tracking and managing your cash flow become difficult. It also becomes nearly impossible to confidently gauge the financial health of your venture or make important business decisions.
You are missing out on Tax deductions:
Tax-deductible business expenses include digital downloads and online subscriptions. Rent for office space is also one example.
But chances are you’ve likely missed a few deductions over the years because you never tracked them. It’s also easy to miss obvious tax write-offs when you’re scrambling to update your books at the last minute.
Thankfully, bookkeepers keep track of all your transactions and assign them to the right expense categories to reduce your total tax bill. They’ll also have 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 to Handle Everything:
Growing businesses mean more clients, higher billing volumes and more back-office paperwork.
And as your business grows, your to-do list does too. But there’s only so much work a person can do in a day—and as the person running the show, your time is extremely valuable.
When you’re responsible for your own bookkeeping, you may be removing yourself from more important tasks, such as marketing and client work, that will help grow your business and increase your revenue.
You’re Not Excited About Managing the Books:
Do you regularly put off managing your books for as long as you can?
If you’re not passionate about business finance, we bet you’d much rather reach out to new clients than print out trial balances and income statements. But despite how crucial bookkeeping is to the success of your business, filling your days with tasks you hate is a surefire way to deplete your motivation.
If you don’t have the time, knowledge, or desire to manage your books yourself, there are thousands of professionals out there who’d love to help. Consider outsourcing your basic bookkeeping needs so you can free up your time and head space, rekindle your passion for your work, and reconnect with the reasons you started your business in the first place.
You’re Not Confident in Your Bookkeeping Skills:
A certain amount of knowledge is necessary for your company’s financial security and health.
Without it, you won’t have an accurate picture of where your business is at. And in the worst-case scenarios, you can expect a letter from the IRS notifying you about the exorbitant late fees, interest, and penalties you now owe.
These situations happen more often than you’d expect. So if you have doubts about whether you’re managing your books properly—maybe you’re unsure about the integrity of your financial records—hire a bookkeeper for peace of mind.
You are paying your accountant to do your bookkeeping:
Accounting and bookkeeping are two different things. Bookkeepers keep track of financial transactions while accountants interpret and analyze these financial data.
The problem is, if you’re not regularly updating your books (see point #2), you’ll have to ask your accountant to organize all your financial information ahead of tax season. They’ll need to make the necessary adjustments to your books and assign expense categories to your transactions—all tasks your bookkeeper could’ve done for much less.
If this situation sounds all too familiar, consider hiring a bookkeeper well ahead of tax season for some catch-up bookkeeping (where they get your books up-to-date and organize your past paperwork) and properly maintaining detailed books for your business moving forward.
Get the Financial Help Your Business Needs with UptoDate Bookkeeping Services
If number crunching feels like the last thing you should be spending time on, it’s worth exploring a solution.
UptoDate Bookkeeping is based in Blaine MN and serves the Minneapolis/St. Paul and surrounding areas.
Give us a call today or book an appointment on our website.