Ryan Vaughn explains why small-business owners should hire a bookkeeper instead of doing it themselves. Outsourcing saves time, ensures accurate financial statements that reveal tax-saving opportunities, and lets you focus on growth. A common mistake: misclassifying payroll as a liability inflates your taxable income.
Stop! 3 reasons to consider not doing your bookkeeping anymore. Number 1, save time and reduce stress. So technically that's 2 things already, but we're counting it as one. How many hours are you spending every week, every month doing your bookkeeping? Or worse, are you delaying doing your bookkeeping knowing you're the one responsible for it? So if you don't get to it, you're like, fine, I don't have reports to look at. And then you find yourself at the end of the year trying to do all 12 months of your bookkeeping all at once. How many hours a year are you spending doing your bookkeeping? Hiring that out, you obviously save that time. With the reduced stress level, a lot of times clients are curious about the accuracy of what they're putting into their books. Is this account or this transaction— does it go— is it going into the right account? I don't know. Maybe they don't. Maybe they do know. Maybe they don't know. But sometimes they're stressed because most business owners who are not accountants Do at least acknowledge, hey, I'm not an accountant. So there's always that thought in the back of their head, like, am I actually doing this the right way since I'm not really an accountant? I have the same issue when it comes to simple things that most men are expected to be able to know how to do, like changing oil or using a drill, things like that. I don't know if I'm doing it the right way. It's not something I'm trained on. I'm not a construction worker. I don't have carpentry skills. Similar idea here when it comes to accounting. Reason number 2, make better financial decisions. If in fact doing your own books you're not actually putting the transactions in the right categories, your financial statements aren't going to show the right information. And if you're looking at your financial statements to make business decisions, the information you're using to make that decision isn't as good as it could be. By having an accountant do your work, having consistent transactions in the right categories, you will be able to find trends and things. You will spot things in your financials that will help you see Why you made more money, when you made more money, and what you did to generate that additional revenue. Why did expenses increase? What, what happened? Seeing the number on your financial statements will help you trigger the right question to ask. And since you know your business and what actually happened that led to the consequence of the number on your financial statement, you'll be able to Reverse engineer the success that you're looking for. And that leads to the third reason: it does increase your profitability. Making better financial decisions increases your profitability, so that's a natural consequence. Saving time— what? So if instead of putting the 5 hours a month into my bookkeeping, or 10 hours a month, however long it's taking you, what if I I can take that time and put it into getting more clients, improving the efficiency of how we deliver the service, which saves all my team time or myself time. Freeing up that time to then invest in other areas of your business increases profitability. And sometimes, honestly, just having the information in the right spots on your financial statements increases your profitability. Having the stuff in the right spot helps you take advantage of tax strategies that may not have been apparent that you could be taking advantage of if the books weren't done the right way. I mean, we've had clients come in that have done their own books and we'll look at their financials and this may not make sense, it's okay if it doesn't, and I, there's a little accounting jargony and I apologize, but they had put their payroll expense on their balance sheet listing it as a liability, meaning at some point in the future I need to pay this, even though by them paying it, they were just putting it into this wrong category. Well, that means their payroll expense wasn't showing up as an expense on their profit and loss statement, which means their taxable income is higher than it should be just because they accounted for the money the wrong way in their books. The cash was out of the bank account. They legit spent it. They didn't have it to spend, but the financials that would be used to prepare their tax returns was not reflecting that expense. Therefore, they were going to overpay in taxes to a tune of quite a bit of money. So it's really important to make sure that we are in fact doing the books accurately, consistently, and really timely, so that at a minimum, if you're doing your own books, you want to look at it once a once a month, get that report. So consider those 3 things, and if you are doing your books, you might actually, by investing in a bookkeeper, save yourself some headache, reduce your stress, make better financial decisions, and increase your profitability.
