Okay, no pressure but like, how’s your DIY bookkeeping going?
For any small business to keep their ducks in a row, it’s essential that you’re getting this vital part of your finances handled. Oh, and here’s a PSA for you: bookkeeping and accounting are two separate things.
Bookkeeping is the process of preparing information used for financial statements. This means you must gather and record the transactions of your business. Other tasks include writing checks, making deposits, and reconciling bank statements, so being a bookkeeper means doing some heavy lifting in the finance department.
Accounting, on the other hand, is more subjective. It means analyzing those financial statements and all of that info you got when you did your bookkeeping. One accounting professor (D’Arcy Becker) broke it down quite well: “Bookkeeping is designed to generate data about the activities of an organization. Accounting is designed to turn data into information.” Well said, D’Arcy!
Operating a small business means loads of hours and hard work, which can be overwhelming. You started your business because you are passionate about raw foods or upcycling clothes — not to crunch numbers late into the evening. It’s no wonder you’ve got a permanent scowl on your face! This wasn’t what you envisioned when you started your small business but no matter, it’s something that has to be done. Perhaps bookkeeping is your least favorite part of running a small business, it’s something you have to learn to do, but who says you need to become an expert? DIY bookkeeping is awesome… if you happen to be a walking calculator. However, outsourcing bookkeeping is one way to delegate responsibility and ensure you don’t go insane or cross-eyed forever. And trust us, you want to keep your sanity in this cutthroat world that is called, business.
Outsource Bookkeeping 101
There are many reasons to throw DIY bookkeeping out the window and make the move towards outsourcing. The first and most evident reason is because DIY is DIY — you literally have to do it yourself. How often do your at-home projects turn out as nicely as the posts on Pinterest? Truly.
Okay, maybe your small business is all about crafting essential oils for new moon rituals, but that doesn’t mean your skills are applicable to numbers. Seriously though, not dissing the DIY genre because we are all about some made-from-scratch honey facial serums. It’s fun, but you’re not meant to do everything as a professional. Here are reasons you should invest in outsourcing your bookkeeping:
Save Money, Save Time
Did you know by outsourcing bookkeeping you can save money? Rather than doing it yourself and taking up unnecessary time, your CEO boss self can do your boss duties. And instead of hiring an employee in which you’d have to provide training, benefits, and insurance among other things, you cut that cost when you outsource bookkeeping. This way you can focus on what matters — the business side of things (and happy hour). It’s a simpler and easier way to get things done.
Gathering info from far and wide can be so much easier when you outsource your bookkeeping. Who has time to dig through accounts, receipts, and statements to know exactly how much you spent on office supplies? Outsourcing bookkeeping means all your documents are organized in one place and are so much easier to access. Your bookkeeper will also help you file taxes in a timely manner while taking advantage of tax deductions. Once you’ve done that and handed off the information to your accountant (that hopefully isn’t you, no offense), wipe the sweat off your brow and have a celebratory cupcake because the hard part of doing taxes is over.
Are you one of those individuals with stacks on stacks of financial documents? Do you have binders with sheet protectors full of receipts sitting in your office closet? Well, not anymore! When you outsource bookkeeping, you can have access to your financial records digitally. That means anywhere, anytime! You need to magically pull up a statement from your sunshine getaway super serious business retreat in Mexico? Click, click, click and bam! Everything available at your fingertips.
So, you now know better than to have your recent college grad employee work the books for you. They’re great at project management, but not all there when it comes to numbers (they literally ordered you 84 too many packs of post-its). As everything becomes digitized, maybe you’re afraid that your information will be hacked? Using the cloud is actually a safer storage method than, let’s say, your hard drive or binder. Chances are those things can get stolen. However, everything placed on the cloud is backed up. Not to mention, cloud bookkeeping has multiple levels of data protection and does constant testing for disaster recovery. Technology is an upgrade to those old school methods. It’s time to get together with the cool kids.
Separate Roles for Goals
When running a small business, it’s obvious that everyone on the team will have to wear multiple hats. Ideally, you wouldn’t want your chief cake decorator to also write press releases (things could get messy). Similarly, you don’t want someone working payroll to also reconcile bank statements. Why? Because everyone’s role should reflect their strengths. In order to avoid potential fraud or inefficiencies (or just plain burnout), separate those responsibilities. Don’t have one person do everything—as much as you’d like to trust an employee to do so, your money is sacred.
And think about it, if office politics means who stole Jeff’s sandwich from the fridge, do you really think actual important things (sorry Jeff’s sandwich) aren’t at stake? Occupational fraud can mean a huge loss for your business. By outsourcing bookkeeping, this issue is avoided and the role is separate for sure. In the end, your small business will be in safer hands. Like ours, come on over buddy, we’ll take care of you.
The more information you have, the better business decisions you make. With your financial records in order, you have the knowledge to figure out what clients you should invest more money and where to allocate your marketing budget. You’ll have the time to analyze your business strategy based on more accurate information. It’s more reliable than doing it internally where you might have to take another glance at those numbers that might look slightly off. This way, you can grow your business in meaningful ways by focusing on the things that matter (like expanding your business to include doggie formal wear).
Find the Keeper For You
Outsourcing your bookkeeping might seem like a big step, but it’s not impossible. More than anything, we want you to be informed to make good business decisions — starting with bookkeeping alternatives. With all the hype around outsourcing bookkeeping, maybe you’re wondering, “Who can do this for me, and can I trust them?” Those are good questions, and the answer is — you have options. You can choose to hire someone local or work with a bookkeeper virtually. Considering the climate we are in, communicating with your bookkeeper remotely through software can be beneficial. Also, you can always access all your financial information online. The last option is an in-house bookkeeper which means hiring an employee. Let’s take a closer look at these options so you can best determine what works for you.
Option 1: The Local Bookkeeper
Local bookkeepers are great for businesses that prefer face-to-face interactions and physical records. You can hire a freelancer or work with a firm. Freelancers will often work with you one-on-one to get the job done. They also vary in terms of experience, so be sure to vet your freelance bookkeeper before hiring. Working with a firm is a bit pricier but they’re professionally certified and in the event that your bookkeeper is unavailable, another person can step in to work on your finances. You won’t have to worry about the financial state of your business. And let’s just say that a little “hakuna matata” in your life is absolutely priceless. Also, here’s an important piece of advice: Never give your bookkeeper control of your treasury functions. That includes things like signing checks, making online payments, or handling investments. As much as you might trust your bookkeeper, keep that power to yourself. There are just some things you should handle on your own.
Option 2: The Virtual Bookkeeper
If you’re more of a, “I don’t want any kind of clutter” type of entrepreneur, we get that and respect it. You might be on the modern side where you’re down to digitize everything including your books. If so, outsourcing to a virtual bookkeeper may be just the thing for you. Virtual makes it sound like software or a machine doing the work, but it’s actually a real human person, just online like we are right now! And well, they do use software to monitor your finances. How do you know it’s a person? You can chat with them on the phone or message them online to verify and talk business. Virtual bookkeeping will connect you with a professional through a secure, online account. It will monitor and record your transactions through your online banking and payment processor. A payment processor is a company that takes care of processing credit and debit card payments. So once tax season rolls around, you’ll receive the ever-exciting gift of your financial records.
Option 3: The In-House Bookkeeper
Of all the options listed, hiring an in-house bookkeeper is the most expensive. Not only do you have to pay their salary, they also need employee benefits. This is a great way to do books for larger businesses — those with over $1 million in revenue or over 30 employees. The bookkeeper works with you directly so you have better access and can discuss finances whenever you’d like. However, because it is the most costly option, if you’re dead-set on going in-house, you can hire a part-time bookkeeper.
Leave It To The Pros
There are so many reasons to outsource. With tons of bookkeepers out there, you’ll find your match. We’re sure of it. Just put yourself out there, be yourself, and don’t order the roasted garlic poutine (although delicious). Be sure to do your research, ask the right questions, and discuss what you’re looking for. Don’t be a hero and try to take everything on by yourself. When the going gets tough, getting tougher doesn’t mean wearing yourself out to the point of exhaustion. The wear and tear of your body and mind are not worth it. Breathe in, breath out and count your blessings — let someone else count your change for you.
Wait, what? You want us, Alchemy Accounting, to help you with that? OMG that is like, the best idea ever. Seriously, we are here to set your heart at ease with any bookkeeping hullabaloo. Did we mention we’re bookkeeping whizzes? It’s our circus and we’re certified ring masters. Outsource your bookkeeping to us and we’ll tame those books for you. Because we’re not clowning around!