Why do you need a bookkeeper?

Every day I meet people in varying stages of their business development. Only some small business owners know that finding a good bookkeeper can mean the difference between operating a business successfully, or closing your doors.

Bookkeepers help you to manage the financial side of your business by tracking and classifying all financial transactions your business has. As soon as your business makes its first purchase, or makes its first dollar, you need to track and record that. This will help you when you manage your bank account and also when you go to file your taxes . It will help your CPA make sure that you get the most benefit from your tax return at the end of the year, and it will save them time (which will save you money).

If you're looking at renting a space, or hiring an employee, or seeking an investment or loan, it is essential for you to know at any given point, where you stand financially, and where you expect to be in coming weeks / months / years. Bookkeepers not only manage the day-to-day entry of your business' financial transactions, they will provide you with financial reports and planning tools as well. These reports include the profit and loss statement (or PnL) which will list your income and expenses and a number that will reflect your total profit (if it's positive), or total loss (if it's negative). You will also receive a balance sheet that will show the assets owned by the business, the total liabilities, and the equity you have built in your business. All of these numbers are important to maintain throughout the year on at least a monthly basis vs. just at tax time.

Bookkeepers can, and will, offer insights that will help when planning for the financial future of your business. Many business owners don't feel that they have an aptitude for numbers or accounting, and that's okay. Your bookkeeper probably doesn't have an aptitude for growing plants, or designing buildings, or making wine. In over 10 years, I have not met a single person who got into business thinking "YAY, I get to do accounting now!" (well, maybe an accountant). Entrepreneurs decide to open their business because they have a special skill, service, or product that they are excited to offer the world. Even if you feel that numbers aren't something you're good at, it is a good idea to maintain regular communication with your bookkeeper. It is extremely important that you choose to work with someone who can decipher the numbers, and explain your financial reports in a way that is easy for you to understand. If there is anything you don't understand, ask questions. This will empower you as a business owner to make financial decisions that are responsible and appropriate for the growth of your business.

#coaching