A skilled bookkeeper saves you money by reducing human mistakes and ensuring that bills are paid on time. Consider a situation in which your business is transitioning from an idea to a legal entity. There are numerous things to ponder and think about. Among them might just be the crucial decision of when to get the help of outside specialists to help you with some of the more operational aspects of managing a business. The financial aspect of your freelancing company or small business is almost certainly one of those functions.
While you may not require or desire the services of an accountant, you should consider hiring a bookkeeper to assist with the different financial aspects. The only other option is to train as a bookkeeper in order for you to understand every aspect of your company. This is simply not possible. So, back to the bookkeeper choice, here are ten reasons why you should hire one for your freelancing company immediately.
You don't have enough time to manage accounts on your own
A day will always contain twenty-four hours, no matter how much we strive to prolong it. Until that time comes, there are so many things we can do each day. Something will suffer if you try to handle sales, marketing, shipping, and bookkeeping simultaneously.
Nothing is more crucial to freelancers and entrepreneurs than efficient time management (especially for the sole employee). It doesn't make sense to spend 5 hours on a balance sheet that would take a bookkeeper 30 minutes. Sure, hiring a bookkeeper is a monthly expense, but how many more sales could have been made in that 5 hours? Which situation is actually more expensive?
You do not have sufficient knowledge or understanding
Few freelancers and business owners have finance credentials or even a basic understanding of accounts payable, accounts receivable, and due taxes, let alone operate an accounting software. It's preferable to delegate accounting tasks to a professional who has completed courses and received certification in these areas. That way, faults and difficulties that may cost you extra money will be less likely. Remember that if you neglect to pay a bill or make an important payment, it will have a major influence on your company credit.
You will be less than enthusiastic about the process at the end
To be sincere, bookkeeping is really tedious (for almost everyone, especially in a small business). Most people, I'm sure, would rather be marketing or prospecting for new clients than writing out trial balances and revenue statements. It is understandable to want access to that information, but it would be better if it came as a monthly gift. Although freelancing isn't supposed to be all fun and games, it's difficult to stay motivated when your days are filled with difficult accounting tasks. Don't worry, you'll still have to deal with irate customers, shipment delays, and software issues, and tax season.
The importance of bookkeeping in your freelancing business cannot be overstated. It can provide you with a detailed picture of where you've been, allowing you to make more educated decisions about where you want to travel next. If you don't have the time, expertise, or desire to do it yourself, there are thousands of people that would gladly assist you.
You need a new perspective on your business
Even though you as a business owner believe you have a solid understanding of the condition of the business throughout the development period, it is beneficial to have another set of eyes on the situation. The bookkeeper can organize the finances and generate reports that demonstrate how the firm is performing each month, where the money is going, and how hard work is paying off (or might need improving upon). They will provide the "big picture" by crunching the data.
It will assist in getting away from the mundane parts of the freelancing business
It is not easy to believe that the financial elements of the firm will be exciting. There aren't going to be any strong sentiments about calculating payroll or writing cheques to pay the bills. However, while the bookkeeper may love such activities, it seems sensible to delegate these responsibilities to someone who is motivated to execute them properly.
It aids in the payment of bills on time
Between traveling, keeping the business going ahead, putting out daily fires, and maintaining balance, something is sure to get overlooked. And those are most likely the bills that need to be paid. No freelancer wants their credit to be harmed by late or missed payments, so they hire a bookkeeper to ensure that everything is taken care of on time.
They assist in instilling the proper tax filing habit
Most freelancers do not want to be audited or have the taxman come after them just because they failed to file their quarterly or annual tax returns. There will be numerous tax needs depending on the sort of business structure they've created for their company, including anticipated tax payments, corporation tax payments, paperwork for contractors or freelancers, and other filings. It's important to choose a bookkeeper who is familiar with taxes, payroll, and other business matters.
Accountants aid in the management of excellent cash flow
Because most freelance business owners are so busy, it may not be easy to notice that their client base owes them money. Any late payments here could put a limit on the cash flow that a startup needs to stay afloat. When a bookkeeper is hired, they may keep track of everything and send out reminders to keep the business accounts in check. This will also help when it comes time to seek another round of funding because positive cash flow will be evident, which would not have been the case without the help.
Bookkeepers cab assist in the resolution of conflicts of interest between any business partners
When there are several founding partners for a freelance company, difficulties may emerge when each person has an opinion on how the company's money should be spent and how easy it should be accessed. Otherwise, there may be a disagreement that stifles the startup's progress. That is why the money should be managed by a bookkeeper, who will set up the necessary permission processes to prevent partners from making arbitrary withdrawals.
Accountants help in lowering the expense of financial obligations
Although it may appear that doing everything yourself saves money, the fact is that hiring a professional bookkeeper actually saves you money. That's because there's less chance of human errors, a lack of experience, missed payments, tax deadlines and, delayed accounts receivable. Furthermore, time that could be spent getting a new freelance firm off the ground and generating money to propel it to the next level is squandered. A bookkeeper may help a business save time and money while bringing in more experience and increasing cash flow. So, get started on the recruitment process right now.
They assist in maintaining the freelance company's attention on critical financial requirements
A freelance company beginning requires the founder's full attention, including his or her commitment to developing the concept into a practical product or service. This implies that, as the founder, your time should be spent on marketing, strategy, finance, and other critical areas that require your attention rather than the day-to-day operations of the company.
They can assist new freelance businesses in establishing credit
Because small company owners are viewed as riskier possibilities by lenders and bankers, it may be difficult for them to obtain financing. They don't always keep detailed records of their actions. In reality, complete paperwork is a need for obtaining a company loan or mortgage, which the business bookkeeper can always offer.
They help to perform payroll administration duties
A bookkeeper helps the freelance organization to carry out efficient payroll management and disbursement as at when due. This helps to put errors in payment of accrued wages and salaries to be at the minimum.
They aid in the comprehension and analysis of a freelance company's standing
When a bookkeeper becomes available, the firm can determine where it stands financially. This will assist you in making decisions about where you can or should allocate, invest, or cut down. Any idea or ambiguity may be explained and simplified by a bookkeeper. Recruiting someone to do your bookkeeping has more advantages than you would realize, including lower costs! You'll gain even more for every dollar you spend. Call DCA CPAs for additional information on accurate, analytical bookkeeping.
Bookkeepers assist with sticking to a strict timetable
One of a bookkeeper's responsibilities is to pay bills, and they'll recognize when it's ideal sticking to a budget. They'll also deliver bills on schedule and accurately. When you run your own company, it's easy to get behind on account receivables and payments. Bookkeepers help in the avoidance of late penalties and the prompt payment of invoices.
They assist business owners in avoiding financial difficulties
Accounting services will provide a safety net for freelancing businesses in the event of financial difficulties. If a freelancing company needs to conduct an external audit, having a bookkeeper on staff will be beneficial.
They are available to give insight into business tax returns and work with a CPA to ensure its business operations are in the open during tax accounting periods. They also guarantee that the freelance company's business practices do not lead to a slew of problems.
The bookkeeper can help you with financial difficulties that may arise in your firms, such as the death of a business partner or divorce. A competent bookkeeper must safeguard the firm from a variety of internal difficulties.
Managing a small business and keeping up with bookkeeping work is not a simple task. Whether you decide to do it on your own (although we hope we managed to convince you that hiring a bookkeeper is a good idea) or hire some to help - you can count on Indy to have your back. You can use our invoice generator or invoice templates to save time. We're here to help small business owners and freelancers manage their projects, financials, and contracts.