Many small business owners ask if they really need an accountant or if they can simply do it themselves. For small businesses it can seem like a big expense to pay someone to “do the books”. Others ask what a bookkeeper does, and if they are good value. Today we are going to explore small business bookkeeping and the value you can get from it!
Small Business Financial Statements
Bookkeeping is an incredibly important task for a small business. Your ledger, profit and loss statements, and balance sheets combine into financial statements. These are more than simple graphs and charts showing your cashflow, a financial statement provides you with valuable information about where your money is going. This helps you answer important business questions, including:
- Where are you spending the most money?
- What expenses can you cut back on?
- Can you afford to purchase new equipment?
- Are you on budget for the month, quarter or year?
As a result, small business bookkeeping is definitely important for your financial success. Further, your financial statements are used for business tax return preparations. While you might know how much money your business is making and spending, this doesn’t always translate well into accurate tax returns. Financial statements are important as they compile data into a format that easily translates into a tax return.
Bookkeeper or Accountant?
There is a difference between bookkeepers and accountants, even though their roles do overlap. Their differences do matter for a business owner when they are looking to hire someone to maintain their books and financial records.
Bookkeepers are generally tasked with keeping accurate financial records. A high attention to detail is needed to ensure the numbers are entered correctly and the coding is just as accurate.
Accounting, however, is more specialised. It picks up where bookkeeping generally leaves off. Accountants interpret, classify, summarise, and analyse the financial data. They typically have a more advisory position and offer advice to business owners.
Can an accountant do bookkeeping? Yes, absolutely! They also provide a higher level of guidance to business owners as well. As a result accountants, like those at Siragusa, provide the most value. We can tell you what your financial statements mean, rather than just creating them.
Do I Need a Bookkeeper or an Accountant?
Do you need a bookkeeper or accountant to help with your small business? We have created a checklist for small businesses when they are trying to decide if they need an accountant for their business!
1: Do You Have the Time to Do it Yourself?
Small business bookkeeping and accounting requires keeping accurate records. And accurate records take time. As a result, depending on the size of your business and the number of transactions, you might find it is worth the money to have someone else handle your finances. This frees you up to focus on your business and closing sales.
2: Do You Know How to Do it Yourself?
While accounting technology makes bookkeeping and accounting easier, this may not be a deciding factor for you and your business. Some business owners take comfort in hiring someone who is an expert in accounting and bookkeeping, who can handle their information. You need someone to handle your business for whom accounting and bookkeeping is a profession, not a hobby. While technology is helpful, it can still be difficult for the lay person to handle and understand.
3: Do You Really Want to Take on Your Bookkeeping/Accounting Needs?
While you can do chores around you home and business, many people often prefer to pay someone else to do it. Bookkeeping and accounting, for the lay person, is a chore. While some enjoy it, others might view it as something they’d rather hand off. So if you would rather spend your time growing your business, you need an expert accountant like Siragusa.
4: Am I Really Saving Money, Doing It Myself?
When answering this question, consider more than just the financial cots. Of course, the amount you pay someone should factor into your decisions. But you should also consider what your time is worth. If you feel that the time spent doing your accounting and bookkeeping is better spent on growing your business, then hiring an accountant will save you time and money!
5: Do You Know How to Get the Most of Your Business Tax Deductions?
If you do not have expertise in accounting and bookkeeping it is very easy to make a mistake. And those mistakes can cost your money. You might be a brilliant business person but record keeping isn’t for everyone.
If you are not experienced in accounting then you might also be missing out on important business tax deductions. An accountant can help you apply for the right deductions and ensure you are tax compliant.
Do you need an accountant for your small business? Are you struggling with your business bookkeeping? Contact the team at Siragusa today for help! We can get your financial statements back on track, today!