Bookkeeping refers to the process of recording financial transactions systematically and consistently. It forms the basis for gathering the key financial information you need to run a successful business. With the financial health of your business depending on the accuracy of bookkeeping, hiring a bookkeeper is the wisest decision you can make. While all levels of your business will benefit from their expertise, read about some of the top reasons you need a bookkeeper.
Why Do You Need a Bookkeeper?
Working with a professional bookkeeper can help you throughout your business life cycle. Whether just starting, trying to catch up on bookkeeping, or needing bookkeeping for taxes, bookkeeping services are crucial for small businesses. Some of the most common reasons why you need a bookkeeper include:
- Detailed and Up-To-Date Financial Records: A meticulous bookkeeper ensures your financial records are detailed, up-to-date, and accurate. This lays the strong foundation you need to scale up your business by creating a budget, making strategic investments, and streamlining your cash flow. The accurate and meticulous records allow you to gain control of your small business finances.
- Compliance with Law and Government Regulations: Businesses must file tax returns yearly and comply with various Federal and state tax laws. The penalty for missing the deadline on paying your taxes is 5 percent of the unpaid taxes for every month your return is late, with the maximum being 25 percent. One of the most important reasons you need a bookkeeper is to ensure you always have the financial information ready for the upcoming tax season. This helps you file your taxes accurately, based on real numbers instead of estimates, and file your returns on time to avoid penalties.
- Keep Track of Your Cash Flow: Poor cash flow is the top reason why small businesses fail. A key reason you need a bookkeeper is that they help you better manage cash flow, reflecting your small business’s overall financial health. With detailed records of each cash transaction, accounts receivable, and accounts payable, bookkeepers help you understand how much your business has at any time.
- Better Relations with Banks and Investors: Another reason you need a bookkeeper relates to your relationship with banks, investors, and other parties. Your stakeholders, including investors and banks, require you to provide accurate financial records periodically to ascertain your progress. If you cannot provide the reports when requested, it can impact the funding for your future endeavors. Hiring the best bookkeepers can help you cater to your investor’s requirements for financial records and build a long-lasting relationship with them.
- Budget Accurately: A budget is your business’s financial roadmap to meet future expenses and achieve growth goals. Bookkeeping makes budgeting easier by removing guesswork linked to your cash flow. With streamlined expenses and cash flow, you can easily assess your financial resources to create an accurate budget.
- Be Prepared in Case of an Audit: During an audit, the IRS checks whether your business has correctly reported expenses, taxable income, deductions, and losses as per federal tax laws. You may face a penalty if the auditor finds errors in your financial records. A compelling reason why you need a bookkeeper is to stay prepared for IRS audits at all times with updated and accurate records.
- Enjoy a Better Work-Life Balance: Bookkeeping can be tedious and time-consuming, particularly when many transactions are involved. Leaving the task to the professionals at Bookkeeping For You will help you save time and restore your work-life balance, leaving you to focus your time and passion on growing your business.
Contact Us to Get Started Working with Our Bookkeepers
If you are convinced you need a bookkeeper to help maintain your company’s financial health, or you want to learn more about how our professional bookkeeping services can transform your business, contact us today!