04 Apr What’s the True Cost of Doing Your Bookkeeping In-House?
If you’ve been running a small business for a few years, it’s likely that your questions have evolved from the earlier days of “Where will my next customer come from?” or “Will I be able to make payroll?” to questions more along the lines of “How can I leverage my time better?” and “What questions don’t I know to ask that could grow my business faster?”
You might be evaluating how productive and profitable your systems are, including how you’ve been managing your bookkeeping. Many small business owners start out doing their own books and, while this may save on costs initially, it also comes at the significant expense of spending time on other efforts that would grow the business, such as marketing or product development.
Do you ever wonder, “Where does all of my time actually go?”
While you figure that you’re not losing direct dollars by doing your own bookkeeping, this is also time spent that could be billable client hours. Aside from that, time spent on bookkeeping means that you’re not doing other tasks that would grow your business indirectly, like building customer relationships.
Plus, if you’re a small business owner like Colleen Cruze Bhatti of Cruze Farm, you may find bookkeeping tedious and worry about whether you’re managing it correctly. Or you might have the sense that you could be getting a lot more out of QuickBooks, but you’re not sure which questions to ask or what you are or aren’t doing that might hurt you.
Some of the biggest headaches that business owners deal with when it comes to maintaining their own books include:
- Errors and miscalculations
- Changing regulations and compliance issues
- Staying on top of paperwork and filing
- Preparing for and submitting taxes
- Managing payroll
Time to Bring in the Professionals
These headaches, plus the amount of time spent on bookkeeping and stress over doing it right, lead many small business owners to reach the point where they know it’s not smart to continue doing the books themselves. They realize the time has come for professional guidance that will take their business to the next level. At that point there are two options: hire a staff bookkeeper, or outsource the books.
The average annual base cost of hiring an in-house bookkeeper is $42,374, according to salary.com’s most recent assessment, and that doesn’t include benefits. This is more than what many small business owners want to budget for.
In comparison, outsourcing your bookkeeping is a much more cost-effective way to make sure your books are in order. You’ll have a dedicated professional making sure your books are done right, freeing up your time to grow your business.
Hiring a bookkeeping company can also save you money in other ways, such as:
- Tracking all expenses correctly to help you take advantage of all possible tax deductions
- Maintaining comprehensive data that helps you avoid IRS fines
- Tax-ready books save time and cost for your CPA or accountant
- Monthly reconciling of your books with your business bank statement and credit card accounts
- Managing payroll
- Financial support and problem solving
- Budget creation and management
- Cash flow forecasting
If you’re a small business owner who’s considering hiring a bookkeeper, come talk to us and find out why clients like Cruze Farm choose Two Roads. We provide friendly, responsive and proactive financial support and actually enjoy bookkeeping. We are passionate about helping our clients grow their businesses, and we do so by using the right software, by diligently tracking where all money is going, by staying on top of profit and loss reports and keeping a running balance sheet, and by providing tight payroll solutions.
At Two Roads, we have the privilege of doing bookkeeping for hundreds of small business owners who are leaders in their industry. We’d love to talk with you about your vision for your business and how we can help you achieve your goals. Learn more about our services, give us a call at (865) 212-0063, or schedule a call.