As entrepreneurs, it’s easy to overlook the importance of maintaining accurate financial records.
Most of us think we’ll get to that box of receipts but after we’re three receipts in, something distracts us, and the rest of the receipts stay neglected in the box until all of a sudden, tax season is coming back around.
But if you’re more proactive from the beginning while working with your CPA, they’re able to get your bills paid on time, build reports, walk through things with you, and see trends in your business.
In a perfect world, you’re going to be making a little more money than you thought you were. One option is to pay more taxes on those dollars or, if you’re with a great CPA partner, they could help you think through these things:
Is there something you might want to purchase for your business?
Are you looking to grow your business in another area?
Is there an investment you could make?
It’s a safe assumption that ninety percent of business owners aren’t good at this. By finding a partner who can help you understand bookkeeping, you can truly elevate your business.
Let’s explore the key takeaways to discover why outsourcing your bookkeeping can be a game-changer for entrepreneurs like you.
The Importance of Good Bookkeeping
With proper bookkeeping, it becomes easier to measure practice metrics, plan for taxes, sell a business, secure financing, or bring in a partner.
A good bookkeeper can provide suggestions and ask important questions to help make informed business decisions. Additionally, having clean and organized financial records is crucial for activities such as selling a business, obtaining financing, or going through an audit.
Effective bookkeeping is essential for the overall health and success of a business.
The Limitations of DIY Solutions
Attempting to handle everything oneself or opting for cheaper solutions can result in financial inefficiencies, missed opportunities, and a lack of expertise.
Many entrepreneurs find themselves overwhelmed by the minutiae of bookkeeping tasks and struggle to stay on top of them. This can lead to incomplete or inaccurate financial records, which can be problematic during tax season or when conducting a practice valuation.
Additionally, entrepreneurs may feel embarrassed or ashamed about their lack of bookkeeping expertise, causing them to avoid seeking help or delegating the task to a professional.
However, it is important to recognize that the majority of business owners and entrepreneurs face similar challenges and that finding a reliable bookkeeping partner can greatly benefit the business.
Sometimes, investing in professional expertise is more cost-effective and beneficial in the long run.
The Value of Delegation
Delegation, especially for simpler tasks like bookkeeping, can free up time and allow entrepreneurs to focus on more valuable aspects of their business. Delegating tasks can lead to increased productivity and business growth.
The value of delegation is that it allows entrepreneurs to focus on higher-level tasks and grow their business. Delegating administrative tasks and hiring skilled professionals can free up time and increase productivity.
It also helps entrepreneurs overcome the mindset of thinking they can do everything themselves and allows them to leverage the expertise of others. Additionally, delegation can provide financial accountability and help with strategic decision-making.
Overcoming the Fear of Delegating
Some business owners may resist delegating because they fear appearing incompetent or failing, but seeking help from experts can lead to improvement, and it’s essential to acknowledge one’s limitations. Overcoming the fear of delegating is crucial for personal and business growth.
Entrepreneurs can overcome the fear of delegating by checking their egos and realizing that other people can do certain tasks better than they can.
They need to let go of the belief that they are the only ones who can do everything and trust others to handle certain responsibilities. Entrepreneurs need to understand that delegating tasks allows them to focus on more important aspects of their business and ultimately leads to growth and success.
Additionally, seeking the help of professionals, such as bookkeepers and accountants, can provide guidance and support in managing finances and alleviating the fear of delegating those tasks.
The Importance of Objective Financial Insight
Having objective financial insight is important because it helps business owners and entrepreneurs identify and address potential issues or opportunities in their financial statements.
It allows them to make informed decisions about their finances, such as identifying expense creep, understanding trends, setting budgets, and making strategic investments.
Additionally, having a partner, such as a bookkeeper or CPA, who can provide objective financial insight can help alleviate the emotional attachment and biases that often come with managing one's own money.
In this episode of The Perfect RIA, Matt Jarvis and our CFO Lisa Zeeveld discuss the ways delegating bookkeeping can help you elevate your business.
In a culture obsessed with DIY fixes, Lisa shares the harsh truths about how trying to save a buck can cost you much more in the long run.
From cleaning up your financial books to letting go of that ‘jack of all trades’ mentality, she’ll challenge your financial assumptions, making you rethink how you manage your money and business.