When a business is just starting, it often doesn’t realize the necessity for bookkeeping. Small businesses are just trying to scrape by and they are usually focused more on making sales than they are on keeping track of what is going on. While it is true that small companies need to focus on the essentials, they would probably be surprised at how affordable bookkeeping can be, not to mention it is a value-added activity.
Owners looking for small business bookkeeping services might want to consider looking in unorthodox places to be able to find good deals. Try hiring a local college accounting student for $8-10 an hour. Most college students want to work between 15-20 hours a week and for a small-sized company that is probably all that would be necessary to keep your books in order. This is a win-win situation as the student gets some hands on experience and the business has its books in order. Note: most accounting students know all the information they need, but they probably will lack the confidence and experience to be able to set-up an accounting system from scratch. If an organization needs to be in compliance with some set of rules, then it may be best to look for a bookkeeper with a few years of experience.
Bookkeeping for small business is not extremely difficult. A do-it-yourselfer could pick up a copy of QuickBooks and a beginners bookkeeping book and learn how to do take care of the books.
Why is Bookkeeping so Important for Small Businesses?
Most new business owners believe that the only reason to keep track of the books is for tax purposes. They thus proceed by waiting until tax season every year before hiring someone to come sort through all of the receipts and other rummage, hoping that they will be able to get the books in order and get a maximum deduction. This is a really bad idea; not only because it is unbelievably cruel to the person being hired to sort through old boxes, but also because the business is missing out on several opportunities.
First of all, small business bookkeeping is important because it is unlikely that a company is going to get a maximum deduction if it is not tracking its expenses all year.
Secondly, small businesses need information to be able to make smart decisions. Bookkeeping provides up-to-date information all year long which will help companies know what to do and when to do it. It is no wonder that 90% of all new businesses fail.
For example, if a company is not tracking its cost, how will it know how much it should be charging? Pricing so that the company is making a profit is one advantage of keeping information.
Bookkeeping can help small business owners know which sections of their business are profitable. This can be very helpful so that a company can focus its energies where the money is.
Most start-ups are very strapped for cash; bookkeeping for a small busienss will allow a company to get a loan. If the banker can see that the books are not being kept, there is no way that company is getting a loan.
The Price of Small Business Bookkeeping
As mentioned above, a company can hire a local accounting student for 8$-12$ an hour and have their books in good shape. A small business can also consider some outsourcing services. This can be great, but it can also be expensive. Most bookkeeping outsourcing companies don’t disclose their prices. They usually will charge some form of monthly fee based on the size of the company they are keeping the records for.
In summary, small business bookkeeping is important for taxes and for keeping track of valuable information in order to make decisions. Pricing varies, but the best bet is to hire a local college student and have him/her work for a few hours each week.
