For small businesses, it often requires a great deal of creativity to make sure that operational systems are in place. As a business owner you’ll likely wear multiple hats, and employees at star-ups may expect to put in additional responsibilities. However, there are certain times that you’ll absolutely have to make sure your books are in line, and you don’t ever want to be caught off guard.
Truthfully, the best time to start outsourcing your bookkeeping is when you’re getting started. This makes sure that you are able to accurately anticipate the amount of time you and your employees will have to spend on making sure your business is productive and runs smoothly.
When you are your only employee, you might be able to handle your own bookkeeping because your volume of activity is so small. However, most successful business owners will tell you that once you hire your first employee, it is time for a streamlined system to be in place.
Another factor to consider is how much the expenses and revenue you generate are each month. If you have relatively low overhead and bills, accounting software may be able to cover your needs. On the other hand, if you have growing bills alongside your growing business, it will get harder and harder for you to keep track of what is coming in and what is going back out.
A huge factor to consider, whether your business is starting out or established, is how much time has to be dedicated to tasks like routine bookkeeping. If you simply update software at the end of each day, this is a great way to stay on top of things, but if you’re not factoring in payment for it, they you are doing work for free. Sure, many small business owners are happy to take this on when starting out as part of the process of growing a business, but you can also quickly burn out, or find that you just don’t have the time and energy to focus on what is important.
The one thing to remember about planning your bookkeeping processes is that you don’t want to wait until it is too late to hire someone to get things in order. If your accountant has to scramble at the end of each year to prepare your taxes, you’ll end up paying him or her higher fees. Similarly, if you’ve been operating on incorrect information, you may suddenly find yourself faced with a flailing business.