The answer is probably yes – particularly if you don’t have any knowledge of accounting or how to deal with more challenging topics such as payroll taxes. Bookkeeping software can make it deceptively easy to think you are keeping good quality accounting records, but accuracy involves much more than the ability to enter checks and deposits. Cleaning up a badly organized or incorrectly set up file later can be both costly and time consuming; much better to get it off to the right start when you set it up.
Spending the money to hire or outsource quality bookkeeping services is some of the best money you can spend. Not properly accounting for your revenue, expenses and capital expenditures can cost you money in any number of ways, including:
- missing expenses you can deduct for tax purposes, effectively raising your tax bill
- not sending invoices and statements out on a timely basis means it will take longer to be paid and negatively impact your cash flow
- falling behind on the bookkeeping will result in you not having an accurate snapshot of the financial state of your business
- spending so much time on the details may blind you to the strategic issues for your business – the old “can’t see the forest for the trees” analogy definitely applies here
- errors with mishandled payroll or sales taxes can result in significant fines and penalties
- using your time to do bookkeeping probably isn’t the most productive use of your time from a business growth standpoint
Use a good quality bookkeeping software program such as QuickBooks and hire or outsource the task of using it to someone qualified to do so and who understands how to use the program to its best advantage for you. QuickBooks also offers you the opportunity to backup your data online so that you are protected in the event your business suffers a disaster. If you can’t find someone locally, consider the options available on a “virtual” basis from services like Elance. You don’t have to lose control of your data, just provide access to the file for the person providing the service.
And using a bookkeeper will also provide you with someone who can keep all your financial records in good order so that you don’t have to and make it easier to prepare for your taxes at the end of the year. If your books aren’t accurate, you can’t effectively manage your business, so don’t be penny-wise and pound-foolish about this.