Every small business owner is also an expert juggler, to begin with. From owner to CEO to CTO to salesperson – you wear several hats and expertly juggle all these different responsibilities. But as your business takes off and begins expanding, expertly juggling all these responsibilities becomes difficult. One of the most challenging tasks to keep up with is bookkeeping.
Bookkeeping must be done regularly, as any lapse can lead to much stress later during tax filing and even mess up accounting and financial plans.
To avoid all this, you could consider outsourcing your bookkeeping requirements to an expert.
The Importance of a Professional Bookkeeper
Before we go into the nitty-gritty of how helpful an outsourced bookkeeper can be for your small business, it is essential to understand the difference between bookkeeping and accountancy. While many small business owners are quite ready to hire an external accountant, not many realize how having your financial books in perfect shape is more important.
Simple as it may seem, bookkeeping comprises many things that must be done systematically and regularly. It is a time-consuming activity that requires not just patience but also focus. Any errors in your book entry can snowball into errors in overall budgets and future financial plans. The job of a bookkeeper includes many crucial things:
- Documenting, classifying and maintaining every business financial transaction, including revenues and expenses
- Preparing invoices and managing payments to suppliers, associates, and other support staff
- Preparing and maintaining general ledgers and other financial statements
- Handling the company’s banking activities, including repayment of loans or credit card dues
- Managing the payroll system for employees
- Taking care of all taxation-related tasks
Thus, bookkeeping is a job that requires much skill to keep your business on track and ensure that the cash flow remains undisturbed.
Why Do You Need an Outsourced Bookkeeper?
Reduces Burden on Existing Staff
Any business in its initial stages works with a limited staff that multi-tasks to keep costs down. But as the workload begins piling up, you slowly start employing more people. However, often, bookkeeping gets delegated to one of the more competent and organized employees. This cuts the time the employee can devote to his job requirements, affecting the overall business.
An outsourced bookkeeper is a specialist with an in-depth and updated knowledge of the subject. They know the changes in tax benefits, CRA‘s documentation requirement, and the latest technological tools you can use to streamline your bookkeeping processes. An expert bookkeeper can save substantial money you could otherwise lose in late payment penalties or tax benefits you couldn’t claim because of a lack of supporting documents.
Easy To Analyze Financial Patterns
Being an expert, an outsourced professional bookkeeper does more than just record-keeping and documentation. Through their thorough job, they help highlight your small business’s spending and earning patterns. They even highlight specific data sets, such as what segment of your business brings in the most revenue or eats up most of the expenses. By learning about the strengths and gaps early, you can tweak your strategy and plan the next step to keep business operations efficient.
The financial records of your business are confidential and sensitive data. Thus, maintaining them is a job of great responsibility. With no vested interest in the day-to-day activities of your business, an outsourced bookkeeper is a neutral entity who can do the job on hand without being tempted by personal gains. Plus, they can provide a third-party, unbiased opinion about your financial affairs and suggest ways to organize your books better.
Back-up of Your Data
Expert, outsourced bookkeepers often have a system of keeping back-ups of all essential data. In case of any mishaps, the bookkeeper keeps these details safe, ensuring your financial records are available. Most importantly, a streamlined and well-maintained bookkeeping system can save a lot of time during tax filing with the CRA or in case of an audit.
Helps Avoid Late Payments
Receiving payments from clients and customers and making payments to employees, suppliers, creditors, and CRA is part and parcel of your business activities. This flow of cash from and to your account keeps your business running smoothly. A well-maintained bookkeeping practice can help you sustain adequate liquidity for your daily business needs without any cash flow hitches. Moreover, timely payments help improve your business credit score and avoid penalties.
Helps Gain Funding
Potential lenders and associates always ask for specific information and prefer studying your financial records before signing on the dotted line. Accuracy and transparency are the key factors in such cases, and a good bookkeeper maintains the necessary documents required to attract potential investors or buyers. Well-maintained books of accounts can help you score brownie points with investors.
Hiring an external bookkeeper could prove to be cost-effective for small business owners. It helps you focus on expansion plans for your small business and keep the stress and burden of taxation at bay.
Contact KSSP Partners LLP in Markham and Across the GTA For Your Bookkeeping Needs
Hire a professional bookkeeper to outsource your bookkeeping requirements so that you can give your business the attention it needs. At KSSP Partners LLP, our trained and experienced bookkeepers can provide services for all your bookkeeping needs. To learn more about how KSSP Partners LLP can provide you with the best bookkeeping expertise, contact us online or by telephone at 289-554-5997.