Bookkeeping is a vital component for a successful business that is usually underrated. Having accurate, timely records makes completing business functions and planning for the future much easier. If the person in charge of your bookkeeping does not have a deep understanding of each of the financial statements and the principles of accounting, your bookkeeping records are likely not accurate. Often, though, small businesses have a hard time making this a priority.
Why You Shouldn’t Do Your Own Bookkeeping
Small companies usually do not have quite enough bookkeeping work or sufficient funds for a full-time bookkeeping employee. So either another employee takes on those duties in addition to their other tasks, or an outside firm is paid to do the bookkeeping. Keeping the role in-house sometimes means the bookkeeper does not have the right experience for the job, or may not fully keep up with financial records as other work gets in the way. If the bookkeeper does not have a background in accounting, finance or similar, records likely will not be accurate and can detriment the business.
An outside firm – Rektio Accounting – can help small businesses with their bookkeeping needs. A contracted CFO has plenty of experience in this area, and provides an unbiased perspective on how your business is doing and what a reasonable plan for the future looks like. They can manage your books correctly, allowing you to make better-informed decisions regarding your company’s plans. These CFOs specialize and focus on the business’s needs while remaining impartial and honest about the state of the company.
Because of a CFO’s background in accounting and finance, their expertise ensures that you are not missing anything in your records. Certain expenses that you may not realize could be tax deductible, and this could save a good amount of money. They make sure little slip-ups are accounted for – maybe you accidentally used a personal credit card for something, or have not been calculating your mileage for business-related driving. While these instances seem trivial, they do add up and can change your business if they are reported correctly.
Besides making sure your expenses are accurate, a part-time CFO also saves you money because contractors are only paid for work done. They do not receive a salary, benefits or vacation pay, and you may have one month where you need more work done than another. CFOs can also be trusted advisors about the general direction of your company. Besides keeping track of the “numbers,” contractors can explain these numbers in detail and in layman’s terms, as well as provide an analysis of the past, present and future state of your business based on their expertise.