Why do you need bookkeeping?

As a small business owner, there are three main reasons why you need to keep a set of books.  These reasons are as follows:

1. Taxes – Income or loss from the business needs to be determined in order to pay income taxes.  Other taxes the business may be liable for are sales and use tax, personal property tax and payroll taxes if you have employees.
2. Reporting – This is the measurement of the financial results from business operations.  Shows if you are making a profit, identifies what costs you have, provides information needed for management of cash flow, etc.
3. Finance/Banking – Financial statements are required by banks when seeking financing (business loans) to operate the business and by vendors when extending credit.

Who does your bookkeeping?

It is not a question of do I need to keep accounting records; the question is how do I keep the books.  Bookkeeping for a business is accomplished by incorporating one of three possible methods.

1. Do the books yourself
2. Hire a bookkeeper
3. Outsource the work to a bookkeeping service

If you are doing the bookkeeping yourself, you may not consider this a pleasant experience.  Most people, after finishing a long day on the job do not want to spend several hours every evening going through the paperwork.

Hiring a bookkeeper will free you of this task, but you will have the costs and tax requirements of having an employee.  Another question is, are they knowledgeable, experienced, and qualified to handle this important part of your business?

Another option is to outsource your bookkeeping to a professional who has adequate training and experience, and who is a person you can trust in overseeing this part of your business.

What are the benefits of outsourcing?  

The main areas of every business are production (the work or service that you perform), marketing (attracting customers), and financial (bookkeeping and taxes).  Many small business owners have to cover all these areas themselves. 

If a business owner is an electrician, they know electrical work, but they probably know very little about bookkeeping.  How do they deal with the IRS that says they are late in making an estimated tax payment, or the bank that says it needs their financial statements in order to approve a business loan? 

Some benefits of outsourcing are:

· Reduction of employment related expenses and issues
· Gained access to expertise in multiple fields
· Gained independence
· Achieved cost efficiencies
· Gained access to advanced technology
· An increased focus on core business

Cordle Bookkeeping & Tax Service can help you with your financial record keeping needs.  Please call 740-852-0507 for a free consultation to see if outsourcing your bookkeeping is right for your business.