Businesses that perform well and achieve their financial and accounting goals, typically do well at the basic elements of bookkeeping, such as tracking and recording daily transactions, producing invoices and maintaining and balancing general ledger. Whether they do this inhouse with their own bookkeeper, or outsource to an agency, the simple bookkeeping tasks associated with a small business must be kept on top of, to avoid them becoming a complex and inaccurate series of procedures that over time, can be harmful for any business.
When can bookkeeping become a problem for small businesses?
If your small business can’t afford a dedicated bookkeeper, then you should consider outsourcing to a bookkeeping service, especially if you plan to grow your business and increase the volume of transactions. Fail to keep on top of your bookkeeping, and even the smallest of issues with recorded information, can quickly turn into a big accounting issue, often with serious repercussions for your business as a whole.
Below are several ways that inefficient bookkeeping can harm your business over time:
Miscalculating expenses:
There are many vital details in all business transactions and payments, including hidden fees, interest and recurring payments, and when left untracked and unrecorded properly, can present a significant gap between expected and actual expenses. While it can be easy for smaller expenses to get lost among other details, failure to track and record them accurately almost always has a negative impact on a small business in the long run.
Loss of cashflow
Poor bookkeeping can result in a loss of cash flow, which can spell disaster for any small business. While automated bookkeeping solutions can help you follow up on receivables, many small businesses find it easier and more cost effective to use the professional and reliable services of an outsourced bookkeeping firm.
Inaccurate reports
For any business to get a good understanding of its financial position, and both manage and strategize to optimize its financial performance, it must have accurate reporting. Trying to manage your own reporting as a business owner, especially when you’re not trained and qualified to do so, typically results in bookkeeping errors, all of which can be avoided with the help of an outsourced bookkeeping provider.
Problems with taxes
The quickest route to incurring penalties, losing trust among suppliers and clients, and even experiencing legal problems, is to have an inefficient bookkeeping system. From inaccurate tracking and recording of transactions, to a loss in revenue, misjudged expenses and cash crunches; keeping the IRS on your side and avoiding late tax filing or noncompliance with ever changing tax laws, is imperative for the success of any small business, and only by using the services of a professional bookkeeping team, can this be achieved.
How can outsourced bookkeeping improve your businesses performance?
When you outsource, you don’t just get the services of one experienced and highly qualified bookkeeper, you get the services of a whole team of bookkeepers, and have access to their combined knowledge and expertise. With no costs associated with hiring an inhouse bookkeeper, no vacation or sick pay, and someone to take care of your bookkeeping needs around the clock, outsourcing is the most efficient way to ensure that your business always performs at its best.
Most reputable outsourced bookkeeping firms will offer a free, non-obligatory initial consultation, in which you can learn more about their services and how they can help your small business increase its efficiency and improve its performance.