When a business starts out, the owner tries to control costs by doing everything themselves including being the bookkeeper. This can result in someone unqualified performing the bookkeeping. While this may work on the short term, it may be costlier in the run.
Let’s take an example of your truck needing an engine overhaul. What is your first instinct? Would you just try to figure it out yourself or hire a qualified diesel mechanic? Let’s list the pros and cons!
- The mechanic is going to have the right tools and right knowledge to perform the overhaul in the most time efficient manner and cost effective.
- You have some mechanical knowledge and can YouTube the rest.
- You can go do something you enjoy on your day off.
- How many days would this take for you to do the same?
- What is your lost revenue for the difference in down time?
- How much are the tools will you need to purchase?
- Frustration when the engine is torn apart and you can’t get it back together.
- Aggravation and smashed knuckles
- Safety of not having proper lifts
What does it mean for my business?
OK, you have mechanical knowledge, but honestly, is your time worth the money saved by letting the professional handle it? A smart business owner hires the qualified diesel mechanic, lets them do their job and takes the day off to spend quality time with your family or doing something you enjoy.
The same thing goes for your bookkeeping. A spouse will get volunteered to perform the bookkeeping, or you try doing it yourself. A misinformed banker states that your bank statements will suffice for receipts. Research on google gleans some information off the internet which has to be true since it’s on the internet. You have no idea if your business is financially sound, but you do know that you are generating revenue. You purchase some accounting software from Sam’s Club and try to figure out how to use it by watching hours of YouTube videos, or reading some Dummy Guide on it. OK, so you figured it out, and even printed some financial statements! Yeah!! But what do they mean? Are they an accurate reflection of your business? Did you miss stuff? This is where the expertise of a bookkeeper who is certified in the software will be of benefit to you.
A bookkeeper does more than keep a business checkbook for you. A good bookkeeper classifies these transactions to an expense account, reconciles your bank statements to what you are spending, and sends financial statements regularly. A great bookkeeper will provide you with a clear understanding of what your financial statements mean and can help you to make informed decisions for your business. Most importantly, that same great bookkeeper is going to ensure you have receipts saved matching those transactions so that you have proof if ever selected for an IRS audit.
I have a bookkeeper!
Let’s go another step further and assume you hired a bookkeeper! YEAH YOU!!! Do they specialize in your field or are they a generalist? Think about a specialized doctor versus a generalist. Would you want the generalist performing heart surgery on you? No, you want the cardiac surgeon specialist. Home Time Bookkeeping specializes in the transportation and logistics field and related businesses. This means we have intimate knowledge of what is typical for owner operators to spend on repairs and maintenance in a year. We know when IFTA is due quarterly and FHUT annually. Why do we know this, to help you run your business because these details can easily slip your mind and cost you money in the form of penalties and interest? Is your chart of accounts specific for the industry or what came with the package?