Hiring the right bookkeeper is one of the most important decisions of running a small business. Whether you’re selling a product or a service, having your financials up-to-date and accurate can make all the difference for your bottom line. Here are some tips to hire the right bookkeeper and why it matters for your business.
Sales Tax Reporting
Having the right bookkeeper is especially important for business owners that collect and remit sales tax. Not all sales are created equal and knowing which product or service is subject to sales tax can make all the difference.
Having a bookkeeper who is specialized in your industry can save you thousands in unnecessary fines and penalties when it comes to sales tax compliance. Hiring a bookkeeper who can accurately file sales tax returns is a huge plus. Staying up-to-date with sales tax reports and remitting the proper sales tax each quarter or month will help avoid unnecessary headaches.
Budgeting and financial forecasting is one of the most important tools when it comes to growing your business. Having measurable goals not only keeps yourself and your employees accountable it can also make or break your business in the long run.
However, budgeting and financial forecasting is one of the most underused tools in an entrepreneurs tool box. Why? Simply put – business owners don’t have enough up-to-date financial reports to make informed financial decisions. That’s where a bookkeeper comes into play!
Choosing the right bookkeeping service will ensure you have accurate and up-to-date books. If you aren’t checking your financials monthly then it’s impossible to tell if you’re making or losing money. Creating a budget is vital for your business but the first step is having an accurate picture of your current finances.
Year End Tax Planning
Everyone hates paying taxes – especially small business owners. When you run your own business it can be difficult to project your taxable income. Nothing is worse than owing thousands of dollars in tax and only having hundreds of dollars in your bank account – thats where tax planning can help.
Having accurate and up-to-date financials each quarter can ensure you’re paying proper estimated payments to the IRS and state taxing authorities. With the help of a qualified CPA you can even project what your taxable income will be at the end of the year.
A good CPA will prepare your tax return but a great CPA will help you prepare for your tax return. With proper planning you can reduce or defer your tax burden and significant save you thousands in tax, penalties and interest. But you can’t properly plan unless you have a bookkeeper to give your CPA an accurate financial picture.
Why It Matters
Having a great bookkeeper is important because it shines a light on your finances. If you were a plumber would you install pipes without checking for leaks? If you are a doctor would you not follow up with a patient after a procedure? Likewise, if you are a business owner wouldn’t you check to see if you’re profitable?
If you only know if you made money during the year because your CPA tells you how much tax you owe then you need some bookkeeping help. Financial literacy and understanding the finances of your business is the key to business success.
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