When to Ask for Help
I am always amazed at the number of business owners who think they are going to save money by handling their own accounting.
I am sure there are many that can do it – as far as I am concerned Bookkeeping is just a matter of balancing your checkbook and categorizing the payouts. And accounting is just the next step in the process – analyzing the categorized numbers. And if that was all an accountant or bookkeeper did, I would say go for it – buy a copy of QuickBooks and save yourself a bit.
But the financial side is the least of what accountants do.
Just like you clients come to you for advice in your field, an accountant will have information that the regular business owner just does not have the time to keep up with.
In the planning stages, you should be talking with your lawyer and a business accountant on many parts of your new venture:
- Deciding on a Business Structure
- Introduce you to bankers
- Set up your accounting system
- Teach you how to use your accounting system
- Show you different ways to keep initial costs down
- Help you get all the necessary tax ID numbers
After you have everything running you may be able to handle the day-to-day bookkeeping on your own, but you need to keep in mind that your time is not free. The amount of time you are working to keep the accounting up is that much time you are not earning money, or time away from your family. And on top of that you have some serious legal and tax exposure due to thinks you just might not know about. To help protect yourself, take your books to a business accountant on a quarterly basis and have them review your numbers for issues. A good accountant should also be reminding you of upcoming filing deadlines and any new developments that might affect your business tax wise.
Once you know how to do tasks, and what the results of your work should look like, you may be ready to stop doing them yourself. After all, your competitio is probably not spending his time on non-income generating tasks. That’s the time to consider bringing in a bookkeeper, probably an independent bookkeeper every month at first. That person could handle all the detailed data entry, freeing up your time for other projects. Again – to protect yourself have the books reviewed by your accountant. As the workload increases and you end up with them there 2-3 times every week (or when their fees are greater than a full-time employee of your own) it would be time to start your own accounting department.