If you are tired of looking at that giant pile of receipts on your desk that doesn’t seem to ever get any smaller, there’s something you can do about it right now. You can begin looking for a bookkeeper to hire. If you are a business owner who is considering hiring a bookkeeper, you may be wondering what they actually do that would help your business. Bookkeeping isn’t just hiring someone to keep track of all of those receipts. Bookkeeping involves many higher-level financial skills that you may not even be aware of. Hiring a bookkeeper may really help your business grow and prosper. Here’s a breakdown of all the high-level things that a bookkeeper does.
Keep Financial Records
One of the most important things a bookkeeper does is to keep your financial records. Many business owners assume that all bookkeepers do is to organize financial records. However, bookkeepers actually do much more than that. Bookkeepers keep track of all of your incoming income and outgoing expenses, which makes everything in your business run more smoothly. Bookkeepers can create, organize and maintain all of your financial records. Your records will move from a system of haphazard folders and stacks to computerized, systematic, accurate records.
Not only will your bookkeeper keep all of your financial records organized and accessible, but they can produce easy to read reports. These reports can help give you a snapshot of the health of your business each day, week, or month. Bookkeepers can even produce year-end reports so you can picture where your business was successful in the last year, and where it may need some work. This information can help you make better decisions for your business in the long run.
Many business advisors suggest that the average small business have at least three accounts. You should have one checking account for your accounts payable, one savings account for your accounts receivable, and a high yield savings account for long-term business savings. If you have a business loan from a broker or a federal loan from the Small Business Administration, you may have a separate account. Businesses who open more than one location tend to have a checking account for each of their location. All of these accounts can add up to a headache for you as you try and balance them all.
Bookkeepers also can manage all of your business accounts. If you operate as a sole proprietorship, you may only have one account, but the larger the business is, the more financial accounts you may have. It can be difficult to keep all of your accounts straight, but with a bookkeeper, you don’t have to. In fact, no matter how many bank accounts you have, your bookkeeper can manage them, and give you reports on the state of your accounts. When you have someone else managing your financial accounts, you will be able to move money between accounts quickly and keep all of them prepared for your next round of transactions.
Also, because bookkeepers work constantly in the financial sector, they may be able to save you money on all of your banking and account transactions. For example, your bookkeeper may determine that changing financial institutions will save you hundreds of dollars a month—money you could put back into your business.
One of the most important roles your bookkeeper can help you with is your accounts payable and receivable. When businesses talk about accounts receivable (AR), they are speaking about money the business takes in, through invoices, bills of sale and statements. An accounts receivable balance sheet lists all money owed to a business that hasn’t been paid yet.
In contrast, accounts payable (AP) represents short-term debts that a company owes. These debts might be to vendors you buy products from, or vendors that provide services for your company. Utilities can also be considered accounts payable. You can also add other short-term debts to the accounts payable list, including pest control, wholesale business orders of supplies and even short-term loan payments.
Accounts receivable and payables are a large part of business recordkeeping. With a bookkeeper keeping your incoming and outgoing paperwork, your accounts receivable and payable will be better organized. Most large businesses keep double ledger entries, and your bookkeeper can get a ledger entry system started for you so that you can have as accurate a snapshot of your business as possible.
Guide Financial Decisions
When you first started your business, you most likely guided yourself, and you made decisions based on prior business knowledge you honed over the years. However, as your business grows, you not only have to manage larger financial transactions with a larger customer base and far less time. It’s time to find a guide who can focus on finances and let you focus on other aspects of your business. With all of the information a bookkeeper can offer you, your financial decisions will be easier to make. You’ll be able to base your decisions on solid financial backing. A bookkeeper’s information may also be able to help you secure additional funding, or make decisions about hiring additional employees.
Also, you may not understand the financial standards that lending institutions, creditors, financers, and even potential investors will look for when you want to move your business forward. In fact, there’s a set of standards called the General Accepted Accounting Principles (GAAP) that most businesses use to set up finances. Your bookkeeper and your accountant will use these same principles, and it will make continuing to improve your business’ financial position far simpler.
No matter what kind of business you have, you will have inventory. You may have a little inventory consisting of office and cleaning supplies. You might be part of a medical practice with a medical supply inventory. If you sell to businesses or individuals, your inventory may be extensive. Like nearly everything else with a business, your inventory continues to grow the larger your business grows. In fact, if you don’t take care of the inventory in your business, your lack of inventory control could spell failure. One of the top 10 reasons businesses fail is due to inventory mismanagement.
Bookkeepers can help you with inventory control. If inventory control is essential to your business growth, why not allow your bookkeeper time and money to manage it? Many bookkeepers have inventory expertise, and if you give someone else control ordering and cataloguing, you free up needed time. Inventory control helps you to manage your business more effectively, and even move towards more accurate ordering in the future. Inventory control can be a great way to save some money.
If you began your business as a sole proprietorship, you most likely weren’t paying anyone including yourself. Now that your business is growing strong, you may be faced with employees who have moved from contract labor or part-time labor to full time with benefits. Payroll with fulltime benefits means you’re now keeping track of payroll taxes. These payroll taxes require you to make payments to the state and feds. You also have to contend with pension, retirement or social security benefits as well. With a bookkeeper, payroll becomes much easier for you to manage. Bookkeepers can prepare payroll and keep track of payroll reports. You can track all of your payments and decide which employees to give raises to. Wouldn’t it be nice to spend time giving benefits, raises, and employee profit-sharing, rather than wasting time with payroll spreadsheets?
Turn to Protea Financial to Get Help with Your Bookkeeping Tasks
While many business owners see bookkeepers as simply spreadsheet keepers, bookkeepers are able to perform high-level accounting and inventory functions. Hiring a bookkeeper will cost you money in the short term, but it may be one of the best business decisions you ever make. Bookkeepers can work to streamline your financial process, and allow you to focus on financing, hiring the right employees, keeping your customers happy and attracting new business through marketing and customer outreach. If you need help finding the perfect bookkeeper for your business, we can help. We have specialized bookkeepers and accountants who can become valuable business allies. Contact Protea Financial today, and let us help you connect with a wonderful bookkeeper.
Contact Protea Financial now for help with any of your daily, weekly, monthly, or yearly bookkeeping tasks!