The two best days to hire a bookkeeper are the day you open your business, and alternatively, today.
Tomorrow is the wrong day to hire a bookkeeper.
Tomorrow means it's not a priority and can be put off until it becomes critical. Which is definitely is the wrong day, because when it becomes critical it means it's costing you a lot of money. Money because you have to take time away from producing and serving customers and allocate it to organizing that you put off in the past. Money because you likely will have lost or missed claimable expenses. Money because you may face penalties and interest for late remittances for GST, taxes, WCB and maybe payroll remittances. Money because you may not receive rebates and refunds you may be entitled to.
Two reasons you may be putting this off are because it requires a little work to get organized. But a bookkeeper can walk you through the process and help you with all that paper work stuff. A second reason may be because you feel it's too expensive - you just can't afford it. Let's analyze that one a bit closer...
If you pay $25/hour for a bookkeeper and it takes her 4 hours/month to do your books, it is going to cost you $100. That is a 100% claimable expense, so you don't pay taxes on that. If you normally charge $35/hour to paint and it takes you 6 hours to do your own books, that means it costs you $210 in lost income to do your own books. Not only do you come out ahead but that time is better spent servicing your customers and building your business. Factor in the cost of software and time required to keep up with tax law changes. Also consider that a bookkeeper and accountant will know more tax write off opportunities than you will. That will save you money. Professionals can also help you avoid flagging your account for auditing by making sure you have your claims documented, reasonable and inline with what is normal for your industry. Having a system in place will relieve your anxiety and help you keep up to date with anticipated expenses.
The only advantage I can think of to doing the books yourself is if someone in the family gets some basic training and commits to running this aspect of the business. It is an advantage to know every transaction happening in the business and how it operates in detail. But a good bookkeeper can summarize all the details for you and provide a monthly snapshot of the key vitals of your business.
Hiring a bookkeeper should be one of the first steps to starting a business and likely one of the first aspects of operating your business that is easy and beneficial to sub out to a professional.
If you appreciate the free content on MicroContractor Blog, please share with a link and click the article sponsor's ad: