10 Reasons Why Your Minnesota Small Business Needs a Bookkeeper

Here are 10 reasons why your Minnesota small business could benefit from a professional bookkeeping service to help your business thrive.

Bookkeepers are individuals who manage all financial data for a business partner. Without bookkeepers, companies would not be as aware of their current financial position, not to mention the transactions that occur within the business.

Accurate bookkeeping is also key to external partners, which includes investors, financial institutions, or the government, all partners or businesses that need access to reliable information to make better investments or financial decisions. Simply put, business partners rely on accurate and dependable bookkeeping for both internal and external use.

Many small businesses do not actually hire full-time accountants to work for them due to the cost. Instead, businesses generally hire a professional bookkeeper to provide bookkeeping services. One important thing of note here is that many partners who intend to start a new business sometimes overlook the importance of things such as keeping records of every penny they have spent.

Below, is a list  of just a few choice reasons as to why a small business would benefit from  a professional bookkeeper. 

Reporting To Investors

If business partners have investors in their business, they need to know the financial performance to see the value of their investment in a company. Providing investors current financial statements allows them to make informed and educated decisions in the money they invest and where they should place it. Additionally, keeping business investors happy is crucial, providing them this information not only keeps them happy but also guides them to invest more as well as bringing in other business partners to continue a company’s dream of growing their business.

Better Cash Flow

One of the many things a business partner’s bookkeeper will do is categorize their spending. Labeling the revenues, expenses, liabilities, receivables and much more useful information. All in all, showing a company the money that is coming in and money going out. Allowing a business partner to see if there are any outstanding balancing issues and in which period they may have occurred. All of these can help improve a business partner’s processes while executing their work.

IRS Audit

The law requires A business to keep financial records for their business and to keep them separate from all personal records. If the government receives a red flag on a tax return a business partner filed, they could require that business to be audited. If the business does not have up to date financial records it makes that process much longer and more difficult. If a business partner is keeping their records up to date and accurate it may even prevent the IRS from requiring an audit from their business entirely.

Money Saver At The End Of The Day

Business partners may think that hiring a bookkeeper is going to cost them money, but when it comes down to it, a bookkeeper is going to save them money, all things considered. A bookkeeper will lower a business partner’s risk of an audit, late payments, human errors, tax penalties, and cash flow issues. Many of these issues will end up costing a business much more than simply hiring a bookkeeper in the first place.

Work Life Balance

We all hope to achieve that perfect balance. If a business feels that work is weighing heavily on them and impeding on their time with family and friends, it’s time to hand off some of the workload to a professional and free up a business partner’s time to let them experience more freedom and live their life to the fullest. After all, spending more time doing what a business loves most, running their business and achieving a healthy work-life balance, is what all business partners hope for. Businesses can feel confident knowing that the bookkeeping is operating at a more streamlined, efficient level when business partners can hire a professional to achieve this for them.

Focus On What A Business Does Best

Unless the business a business partner specifically runs is bookkeeping, business owners and their team members should concentrate on those things that they do the absolute best instead. For most startup companies, those things that a business partner excels at are products or services distributed and has nothing generally related to bookkeeping. The major heads of business owners such as Henry Ford, Steve Jobs, and Donald Trump did not create massive companies by doing their own bookkeeping. They spent their time doing what they excelled at, enjoyed and remained focused on, in the profit-making side of their businesses. While they knew their strengths, they also knew how to outsource their struggles to overcome and benefit the business, so the company could become better for it.

Know What Your Business Owes & Who Owes You

Even if a business is considered a “cash business” there will still be payables and receivables that must be handled with frequently. The professional bookkeeper will keep these records up to date and can even aid with collections and negotiating a business partner’s debt. Having a third party between a business and their clients also provides a welcome buffer that can help preserve relationships when payable and receivable issues are prone to arise and must be resolved swiftly. “Talk to my Bookkeeper” can be a reliable way to deflect a conversation when a business personality is not equipped to deal with a situation in a positive manner.

Impressions Count

As the time comes for a business partner to expand their business up to another level, bankers and investors are likely to be impressed that the business partner has the good business sense to hire a trusted and reputable bookkeeping service to manage their accounting and bookkeeping requirements. In many cases, a business’s bookkeeping service can represent their interests and speak directly with lenders and investors, knowing in advance the information required to make the business expansion happen.

Having A Clearer Picture Of Financial Health

While most business owners wear many hats and know a little about a lot of things, their company’s “vision” may not be completely in focus, however which can complicate things. A bookkeeping service can provide a clearer financial picture of the business partner’s company and enhance their decision-making process. Having access to up-to-date records is also much more efficient than the alternative process which might involve stopping what the business is best at doing that moment. Gathering information that may or may not be up to date, and then stepping back in struggle to see the financial picture of the business, all while trying to get back on track with the project they had to just put on hold. Meanwhile, a professional bookkeeper could easily have handled without slowing up the process, and all the hassles of the paperwork for the business partners in the same task.

Perform Stock Taking 

For some businesses, bookkeepers also produce inventory reports by counting stock items and product inventory. If there are any discrepancies, they report back to the business to make sure a business partner can address these problems quickly.

Often, it is carried out at the end of a business’ financial year end with the figures featuring in reports such as profit and loss statements, while the slightest error in these numbers can lead to massive headaches and financial trouble for a business. Not to mention days if not weeks of backlogs and data checking just to correct this if not effectively managed.

In summary, business owners can develop the attitude that they can do it all which, in many cases, overwhelms and stresses them, leading to failure in a noticeably short time. Hiring a full-time professional bookkeeper in their company requires the commitment for salary, benefits, and payroll taxes, and in many cases is beyond the resources that are available. The answer is quite simple; hire a bookkeeping service, to better handle this struggle for a business.

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