Signs It’s Time to Invest in Bookkeeping Support
It's common for freelancers, solopreneurs, and consultants to wear many hats in their businesses. When push comes to shove, doing it all yourself can seem like a great way to save money, but some expenses actually need to be investments.
If you're still doing your own books, there are likely signs that investing in a bookkeeper could save you money. Here are some of them:
1. You're Avoiding Your Books Until Tax Time
If you do your own bookkeeping and only consider it a task to be completed once before filing your taxes, you're likely losing a lot of money.
Not only are you missing out on regular pulse checks like "how much money am I spending every month?" and "where is all this money going?" You're also likely missing out on the opportunity to take proper advantage of deductions and may potentially be hit with large tax bills and fines.
You also can't accurately pay your quarterly income taxes without accurate information regarding your income and expenses.
2. You Have No Idea Where Your Money Is Going
So you think you make a lot, but your bank account says otherwise? Without clear visibility into how money moves through your business, you can't prepare for growth, increase your profit margins, or feel good about giving yourself a raise.
If you ask yourself "Where is it all going?" every time you look at your bank account or your books, it's time to call in a professional so you can get a better understanding of how to properly account for your income, expenses, assets, liabilities and your own pay!
3. You're Mixing Personal and Business Finances
This is a classic predicament and also a major red flag to the IRS! It's best to separate your business and personal income and expenses to avoid an audit. Yes, that means getting another bank account.
However, keeping personal and business finances separate allows you to: calculate your taxes accurately, track your expenses, prove deductions (if necessary!) and pay yourself properly. If your current bookkeeping system doesn't keep these things separate, it's time to invest in one that does!
4. You're Spending Too Much Time on Admin Instead of Client Work
If you're a service provider spending more time on admin work than selling or delivering your service, you're losing money! Instead of focusing on revenue-driving activities, you're burning cash every time you sit down to google your way through this activity.
Does it feel responsible to save the cash and do it yourself? Yes.
Is it truly a savvy move to promote growth in your business? No.
Ready to focus on doing what you do best? Outsource the tasks to an expert!
5. You're Unsure About Your Tax Obligations
Service-based business owners often struggle to fully understand and grasp their tax responsibilities. While they don't need to account for things like inventory and sales tax, they do need to focus on managing a high profit well to minimize their taxable income.
Aiming for 50% profit enables you to set aside money for taxes, pay yourself and re-invest for growth. Managing your profit effectively means that you’re building a sustainable business.
Before you can start strategically spending money to minimize your tax responsibilities, you must first understand your cash flow and how money moves through your business. To do that, you need accurate books!
If you're not maintaining complete and up to date books each month, it's time to invest in someone who can do it for you.
6. You're Growing (or Want to Grow) but Can't Scale
Congratulations! You’ve built an amazing business. You're getting bigger projects, hiring support, and have your eyes set on scaling…. But you can't get a grip on your cash flow. You’re making decisions based on the amount in your checking account instead of hitting specific financial milestones in the right order.
If you're struggling to find the means to grow (or scale) at the rate you want, then it's time to invest in better financial management so you can make smart, data-based decisions.
If This Sounds Familiar, It's Time for a Change
Investing in expert financial support is a game changer.
The key is to invest in support that allows you to do more of what you love, and what will help your business flourish, and less of what someone else could do more efficiently and effectively..
Ready to take back your time?
Let's chat about how our bookkeeping services can help!
