As a startup, most entrepreneurs aim to do a lot of the back office work themselves. However, as your business grows the do-it-yourself approach will start to become overwhelming. Your back-office tasks will become the last items on your ever-growing to-do list and your bookkeeping tasks will fall behind. Here are some signs that will help you identify when it is time to hire a bookkeeper:
1. Your books are not up to date
When you have fallen behind on entering daily transactions, you are unable to get accurate financial reports and a current profit or loss of your business. Playing catch up and recording 3-, 6-, or 9-months’ worth of transactions at once is not ideal.
With this approach, you are blindly running your business and unable to know the proper financials of your company.
2. Invoicing is Irregular
Invoicing your customers consistently is a necessity in any business. Regular invoicing streamlines your cash flow, reduces the likelihood of bad debts and resolves any invoicing discrepancies with customers sooner rather than later. Your clients/customers will anticipate your invoice if you are on a regular schedule and will normally pay your invoices promptly, which reduces cash flow issues in your business.
3. Bank Statements have not been reconciled
Reconciling your bank statements every month ensures that all transactions, expenses, and deposits have been recorded. Having a reliable accounting system to track transactions and to assist in reconciling accounts is important in operating a business.
Most small businesses start out by using excel to track transactions but as the business grows they will transition to more reliable accounting software such as QuickBooks, Xero, or FreshBooks.
4. Cashflow is unpredictable
Having an unpredictable cash flow stems from unforeseen large expenses, late payments from clients and not staying on top of invoicing. Bookkeepers track your income and expenses and create cash flow statements that provide current information. With proper bookkeeping, you can get updates on your cash flow every month.
5. Spending too much time on bookkeeping
As your business grows you will notice if you are not able to accomplish all the items on your to-do list. You will also notice if you are spending too much time managing your books and not your clients or services. If you are overwhelmed, it may be time to reprioritize what’s most important and outsource your back-office tasks.
How Can a Bookkeeper Help?
Bookkeepers provide devoted time to managing your business revenue and expenses. This frees up time for small business owners and helps them to refocus their time on running their business.
Are you considering hiring a bookkeeper? We can help! Capital Bookkeeping Management are experts in small business bookkeeping. Get a free consultation here!
What is Capital Accounting Management?
We are an accounting and CFO firm dedicated to providing accounting & CFO services to small businesses. We are here to focus on your books so you can focus on running your business. Check out our services and get started with a free consultation!