Business ownership and successful business operation are two different concepts. One involves owning a brand, property and inventory in many cases. The other involves building profits by understanding and meeting the business needs, as well as the needs of its customers. Successful business operation requires the skill of bookkeeping, whether you have these skills yourself or need the help of bookkeeping services like WD Numeric Corporate Services.
Below are the benefits and considerations of using bookkeeping services for your business.
They Provide Neutral, Unbiased Financial Advice
Using a bookkeeping service enables you to have ongoing access to an unbiased and experienced financial perspective. This differs from hiring an internal employee to handle your books, as employees become emotionally invested in a company, its people and processes. Through a service, you gain greater objectivity from this outside resource, particularly about your company’s financial position, strengths and weaknesses.
They Help You Avoid Conflict of Interest
When partners work within a business, having one of those people perform bookkeeping creates a conflict of interest. Business relationships can break under accusations of misconduct, overspending or record-keeping. Most owners certainly put business interests first. But having an owner maintaining the books can open the company up to internal doubt and conjecture. Using a bookkeeping service improves confidence for the partners, investors, employees and other key stakeholders.
They Reduce Your Costs
Cost is one of the biggest factors in business success. You must keep a tight rein on your operating expenses, including in the realm of wages and salaries. This means employing as few people as possible and finding creative ways to meet business needs without spending too much.
In-house bookkeepers require salaries, benefits and training. These requirements add up to significant cost. But you do not need a bookkeeper on staff if you use an outside resource for this function. Then, you only need hourly-compensated staff for accounts receivable and accounts payable functions such as invoicing, making payments, assigning credit for customers and maintaining other financial responsibilities. The external bookkeeper can handle all of the accounting records beyond these surface functions. They also provide financial reporting you need for making big business decisions, all at a lower cost than when hiring and maintaining an employee.
More Benefits of a Bookkeeping Service
Bookkeeping is the foundation of your company’s accounting, as explored above. It is also the most important business accounting function. After all, keeping a clear view of the company’s financial data is important for keeping up with transactions, wages, reporting and financial analysis.
Below are some other benefits of having an experienced bookkeeper:
Having a bookkeeper also means having ongoing access to detailed records. This gives you a better grasp on maintaining your business accounts and keeping a watchful eye on expenditures. These records make providing financial statements easy when audited or going through other financial processes and reviews.
Ongoing Legal Compliance
Good bookkeepers maintain the highest level of integrity in compliance with legal regulations and keeping your accounts up-to-date. As independent contractors or service providers, outside bookkeepers are even more responsible than internal employees regarding their knowledge, training and methods. They must remain self-accountable. By doing so, they save you money and help you avoid the gaps often discovered through inadequate training, processes or hiring decisions.
Official financial statements must go through your accountant or auditor. These processes can take some time. But your bookkeeper always has an updated financial statement ready for your review. You can easily request and receive a current balance sheet to maintain a clear perspective of your company’s accounts for presentation to outside parties, internal stakeholders and others as needed. Through this documentation, you maintain greater confidence in the company’s management and health.
Improved Financial Relationships
Having confidence in your bookkeeping means enjoying improved relationships with your financial stakeholders like investors, shareholders and bankers. Banks are more open to affordably loaning you money when they have a clear view of your business status. Investors frequently seek updates from companies in which they have an interest or for which they have already provided funds. To meet their needs, you only need to ask your bookkeeper for the latest financial reports.
No one likes dealing with taxes. But thanks to your bookkeeper, it is easier to provide official financial statements when the government demands such documentation for taxation purposes. You can also easily predict your tax liabilities when you have ongoing access to your balance sheets. You can find trends in everyday operations that present tax vulnerabilities and gain a confident understanding of how much you will owe at the end of your fiscal year.
Fast Response Time
Having real-time details about your business accounts enables you to react quickly to the ebbs and flows of your market, industry or company as a whole. You will maintain a clear view of the organization’s expenses and revenue. You will be more prepared to know when to act and how instead of feeling nervous, hesitation and wondering if you made the right decision.
Prompt Financial Analysis
Bookkeeping is far less expensive than accounting. Through detailed record-keeping, you reduce the amount of time required of an accountant. As a result, your accountant’s billed hours are also reduced. The bookkeeper picks up the slack in service provision, doing many of the things you previously assigned to an accounting professional. Instead of creating financial statements and analyzing your accounts, this leaves your accountant to focus on bigger matters like taxation and financial strategies.
How to Find a Good Bookkeeping Service
A good bookkeeping service for your company may consist of an independent contractor or a more formal service provider with multiple employees. Whichever type of bookkeeper you choose, just ensure they have adequate experience in accounting and auditing, as well as exposure to your industry. Of course, they must show they have the basic expertise required of any bookkeeper and for associated processes. They must be able to provide clear documentation of your profits, losses, turnover and other financial ratios. Finally, it is important to have a bookkeeping service that instills trust and confidence in their abilities.