The Entrepreneur’s Guide To Bookkeeping
Whether your company is budding or has reached heights in business, bookkeeping is vital. Keeping a track of your daily transaction will consume your time. This process often ends up neglected.
Bookkeeping is a daunting task for many small and medium size businesses. Handling this in-house, without outsourcing it to another business, is difficult. It shifts your focus from the business, and rids you of the opportunity to experience the full excitement.
Why Your Business Needs Bookkeeping?
Profit. Without bookkeeping, there’s no sign that your business will run in the long term. The bank statements alone would not display the true picture.
With your business growing, you may think about gaining new investors or look into getting a bank loan. If you kept your books in top shape, reporting crucial information about the company would just be a piece of cake. You have all the data presentable, ranging from charts, graphs from the books.
It is a must that you file and pay your taxes. Accurate bookkeeping protocols should be set in place. You wouldn’t have to look for coffee stained bills and invoices from 8 months ago. Failing to report proper sales and payroll taxes will land you in trouble. Keeping reports that show your company’s cash flow is important. Bookkeeping makes this process easier.
No business can stand the test of time without an effective cash flow management. Your business calls for accurate forecasting for revenues and expenses. Bookkeeping will be helpful in making informed decisions and improving your financial management.
Should I do my own bookkeeping?
Do I have the time?
Time is a precious commodity to any small business owner. Bookkeeping is a time consuming and tedious task, especially if you are in the early stages. Managing your marketing, sales, customer service, and inventory all at the same time is tedious. You need to know if you have the time to get the task done.
Do I have the knowledge?
Bookkeeping requires a level of knowledge in accounting. Unless you have a bookkeeping or accounting firm of your own, the task is no-fun. Your finances are not the place to make mistakes.
What bookkeeping services are available?
This is a great option for cost, but it isn’t ideal for many business owners. The best accounting software isn’t going to teach you about the regulatory requirements of Sri Lanka. Business owners can miss out on tax deductions and may face inland revenue audit for improper tax filing. A few workshops or classes wouldn’t substitute for the knowledge an accountant can bring to the table. Do it yourself software is more of a bookkeeping tool than a bookkeeping service.
Traditional Bookkeeping Service
The most traditional method is hiring an accountant or a one-man accounting firm. Business owners will need to calculate the cost incurred for both methods. Both methods are expensive when it comes to an hourly consulting fee or the salary and benefits paid to an in-house accountant. In-house accountant will be the best option for larger organizations. For small businesses, costs don’t outweigh the rewards when it comes to an in-house accountant.
Automated Bookkeeping Service
This final type of service is combination of both cloud based software and accountants. Users from anywhere will have access to upload the documents. A dedicated bookkeeper would organize the documents. Accounting service providers offer hours of consultation with no hourly rate. They charge a monthly fee-rate based on the volume of your transaction. This method may not be the best option for larger corporations with many complicated operations.
In-house Bookkeeping vs Outsourcing Bookkeeping ?
Bookkeeping handled within an organization comes with both advantages and disadvantages. If your type of accounting requires a specialized skill set, it is easier to hire an accountant to your set requirements. With a free reign over tasks assigned to the employee, you will not have to pay for specific set of services.
You need to understand that a required level of expertise for each task can vary. To find an accountant with a high skill set, the budget for hiring will increase to a significant value. You will have to dedicate time to train the new hire, which is time that could have grown the business instead.
Hiring a new employee means that you need to invest in salary, space, accounting software and equipment. Is it worth the stress, the confusion and the time consumed?
For a growing business, the most important thing you have is time.
“Outsource it to the professionals” and let your staff work on growing your business instead.
For outsourcing your bookkeeping, you have to pay for only the services that you need and nothing more. You’d save the cost of hiring a qualified accountant to adapt to your accounting system.
A virtual efficient assistant will handle your bookkeeping. If an employee decides to resign during a crucial period for in-house marketing, it would affect the process. Outsourcing it instead would ensure a continuation of work without disruption.
You will have an entire team dedicated to you, and not one accountant assigned. You have recruited a specialized team of professionals who are up-to-date with regulatory requirements. In-depth knowledge will be available from the team, for a fraction of the cost of hiring your own in-house accountant.
Outsourcing bookkeeping will help grow your business by cutting down time allocated to accounting.
- Team of experts
- Proper bookkeeping
- Lower cost
- Expert advice at your fingertips
If you’re a company looking to grow, outsourcing bookkeeping is the ideal solution. If you need help or guidance setting up, let us know. Contact one of our members, who’ll get in touch with you shortly.
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