8 Reasons Why New Business Owners Should Hire a Professional Bookkeeper
Starting a new business is an exciting time! You have so much to do: create a logo, design your marketing, pull together your store, shop or office, hire staff, order inventory and office supplies…and so on, and so on. It’s hard to keep up!
Money is always tight when you’re starting a new business. You don’t want spend money where it’s not necessary. After all, money is going to be tight for the next little while.
That’s why many new business owners “save” some money by doing two things:
- Do their own bookkeeping, and
- Use a spreadsheet like Excel to do it with.
It would to too harsh to say that these are big mistakes. After all, you want to avoid unnecessary expenses. And if you don’t have the money to pay a professional right now, well, that’s reality.
At the same time, I’d like to examine reasons why this might not be a good idea. In fact, it just might be the case that engaging the services of a professional bookkeeper might be a great way to spend some of your precious resources.
- You can get your business set up correctly. Whether it be a sole proprietorship or corporation, setting up various accounts is important. These may include:
- Creating all the accounting categories you’ll need to track your activities (e.g. Advertising⇒Print, Advertising⇒Online, Advertising⇒Newsletters)
- GST/HST accounts with the Canada Revenue Agency (CRA)
- Payroll source deductions with the CRA
- You avoid huge mistakes that you’ll have to pay to have corrected down the road.
- We’ve spend hours fixing mistakes such as, not knowing the difference between an asset and expense.
- If meals and entertainment expenses happen, do you know how to correctly record GST/HST?
- You establish bookkeeping habits early.
- Create a special place where all receipts are gathered
- Learn how to annotate them so you’ll know how they’ll be categorized
- Turn them over to be processed each month
- Expect regular reports about your Business’s Financial Story
- You free up time for tasks closer to the “core” of you business.
- What makes you more money: Sitting down in front of a computer doing data entry, or talking with prospective and existing clients? No-brainer!
- You take some worry away.
- Getting a call or letter from the CRA saying this or that remittance hasn’t been done is stressful. Avoid this.
- You start early to make business decisions based upon updated financial numbers.
- When it’s time to make a large expenditure, or hiring someone, you have to know your numbers. They will help you make better business decisions.
- You compare month-to-month and year-over year.
- Proper bookkeeping software comes with a lot of reports that reveal how you are doing. By starting off the right way you have access to all this information right from the beginning.
- You’ll be ready for your accountant, and he or she will charge you less money.
- By presenting your accountant with a “clean” set of books you are doing yourself and he or she a favour.
- Your accountant wants to look things over make a few adjustments based on your consultations, and get the tax return into the CRA.
- The less work they have to do the better it is for you, the business owner.
Spending money frivolously is a foolish way to kick off a new business. Spend money only where you have to.
When it comes to your bookkeeping, spend money wisely by starting this important responsibility off on the right foot.