At some point in your business you are going to come to the conclusion that you either don’t have the time, the interest, or the knowledge to properly do your own bookkeeping. After all, you started your business to do what you do best and this paperwork is just getting in the way. You work long hours on your business and the last thing you want to do in the evenings or on a weekend, is to spend your time entering receipts. So, it’s time to bite the bullet and delegate the work, but to whom?
Many entrepreneurs in this spot are tempted to hire an admin person. After all, the admin person will be able to answer calls, sort paperwork, and maybe even make you a coffee. The assumption here is that anyone can do bookkeeping; after all, it’s just entering receipts into your accounting software, isn’t it?
Even if you were to pay top-dollar for a top-quality admin person, it’s highly unlikely that the person you hire will be sufficiently skilled in the art of bookkeeping. And if you are like most small business owners, you probably aren’t spending top-dollar on your admin person.
Quality bookkeeping is about a lot more than just entering in receipts. It’s unlikely that an admin assistant will know when to record a purchase as an asset or an expense. They likely won’t know how to properly record vehicle allowances, or meals and entertainment expenses.
Even if you’re lucky enough to find an admin that is able to categorize everything correctly, will they have the knowledge and background to communicate with you when your business isn’t performing as well as it should? Chances are they will only be doing the work as you’ve told them to do it. They won’t be able to communicate when your ratios are deviating from the norms, or your expenses are offside.
The worst part is, you won’t really know if your books are solid until the CRA auditor comes knocking. This is when you’ll discover if the entries made are poorly documented and/or inaccurate.
If you’re lucky, your accountant may find the problems at year-end and charge you extra to fix it before submitting your taxes. More likely though, unless the errors are blatantly obvious, the accountant will just have you sign off that you prepared the books and are responsible for them. You know, it’s in that engagement letter you didn’t read!
From my experience, most entrepreneurs first go-to person is usually their spouse. After all, the labour is cheap, you both want/need the business to be a success, and perhaps your spouse is staying home watching the kids anyhow. However, this has all the same problems as hiring an admin, with the added problem that it may put even more stress on the marriage.
If your spouse is working, they certainly aren’t wanting to spend their evenings or weekends helping you with your business any more than you want to do it. If they aren’t working, why aren’t they working? The reasons for that probably haven’t changed, so why is working for you an exception? If they were looking to get back into work, then ask yourself if they would have chosen bookkeeping? Is this best for them, or just for you?
Working with your spouse can put a lot of strain on your relationship. If you weren’t fighting about your business before, you just doubled the likelihood that you will now.
If you’re ready to pass over the books, it’s much better to hire a professional CPA firm that focuses on bookkeeping. For less money than it would cost to hire a single admin person, you can hire an experienced CPA firm. You get access to a CPA, CGA accountant and a team of brilliant, experienced bookkeepers. You don’t have to worry about vacation, sick days, or benefits.
You can relax knowing that everything has been categorized correctly for tax purposes. The team will stand behind the work in the event that there is a mistake or an audit. In the event of an audit, the documents have all been scanned and attached to each transaction, so that there is no question about the deductions taken.
The team will have the experience to guide you. They will keep their knowledge up to date on the latest tax changes and technology improvements that can help your business. They have developed systems that reduce the chance for errors and increase the quality of the financials. Including proper bank reconciliations to ensure expenses aren’t missed or overstated.
Our services all come included with cutting edge software tools for receipt capture and cloud based accounting software. This gives you access to your information any time and anywhere.
And when we do get together to discuss your financial health and make strategies for your business, we’ll make sure that we make you that coffee.
To learn more about our processes for rock-solid and audit proof books, contact us.