If you own a small business, it’s crucial to hire a bookkeeping service to keep your finances in order. A bookkeeper can keep track of essential financial obligations and review documents like profit and loss statements. A price book, such as the one offered by the LP Solution, can also help with bookkeeping. Listed below are the advantages of bookkeeping.
1. Never Pay a Bill Late
Running a business day to day is time-consuming, and sometimes the little things are left undone. Not paying a bill is one of those mundane tasks that can result in major consequences, and it’s important to delegate this task to someone with the skills and time to oversee paying company bills. A bookkeeping service excels at this because that’s its job. Arrange to have statements sent to the bookkeeper in “care of” your small business, or give him or her access to online accounts to check statements and make payments online.
2. Track Multiple Income Sources
If you’re a small business owner who loves the big picture aspects of operating a business, you probably dread the detailed accounting required to maintain the business. Landing a contract is fun and rewarding. Opening a software program, creating invoices and entering payments received are miserable if you don’t care for the details. Hire a bookkeeping service to take care of those tasks for you. Quickbooks Pro and Peachtree are two examples of small business accounting software programs that allow multiple users and offer online programs. The bookkeeper can log in from his or her office or home and make those entries for you from bank statements or reports that you forward.
3. Payroll
You may be the only employee now, or perhaps you’re in a partnership. Someday your business may grow to include more employees, and bookkeeping services are a great option for handling all of your payroll needs. They’ll write and create checks for you to sign, and some services will mail them out to employees or deliver them to your office for you to give to workers. The same is true for freelancers and contractors that you work with. In addition to payments, some bookkeeping services will prepare a W-2 or Form 1099-MISC for each employee or contractor for tax purposes.
4. Reports
Many small business owners don’t know the true financial state of their business. If you don’t analyze your finances and stay on top of them, your business is sure to fail. Having access to critical financial reports is crucial, and bookkeeping services generate the reports you need as often as you want them. Most businesses require financial reports on a bi-weekly basis, but some need one weekly, and a very small business may need reports only once a month. Whatever frequency you choose, a bookkeeper will prepare the reports for you so that you can see where your business stands and prevent problems from occurring.
5. Avoid Overdraft Fees and Additional Interest Payments
One duty that is often delegated to bookkeeping services is bank reconciliation. Don’t rely on your bank statements to give you an accurate picture of your financial bottom line. A bookkeeper will handle your accounts payable and accounts receivable and enter the information in your financial software of choice so that you know what your real balance is. You won’t make the mistake of writing a check for more than you have available, which can result in an overdraft fee and additional interest on outstanding debts.