How valuable is your time to you? Should you do your own bookkeeping or have a professional outside of your company handle this task? Whether you are a sole proprietor, small business owner or just starting your exciting journey of entrepreneurship, at some point, you will have to make this decision.
Managing your business finances can become a full time job in and of itself. With many businesses failing in the first five years due to mismanaged finances, this decision is worth exploring further.
In general, your two primary resources of time and money are very limited, especially if you are just starting your company. Taking on the behind-the-scenes task of bookkeeping may not be the best use of your time. You can instead use this time to innovate, focus on making your product better, and grow your customer base. During the new business pursuit, success is all about maximizing your time.
Maybe you do not have bookkeeping or accounting knowledge. This can be learned. However, it is likely that you do not have the time to spend educating yourself on accounting basics (nor do you really want to). You would also be required to master accounting software. This could turn into a very time consuming task. One that you may not want to be responsible for.
Cost Benefits of Not Doing Your Own Bookkeeping
For most business owners bookkeeping is not an area that is very exciting. The time it will take you to complete your bookkeeping each month will be understandably longer in comparison to a specialized professional. Not to mention the opportunity costs you would incur in the process.
There is always the option of hiring personnel to complete your bookkeeping in-house. However, utilizing a bookkeeper outside of your company can be very cost effective in comparison. You can eliminate incurring several employee related expenses such as training, medical benefit costs, payroll tax, vacation and sick pay, etc.
Should You Do Your Own Bookkeeping?
Ultimately, the decision will be determined by how valuable your time is to you. Why not cut costs and get some of your time back by enlisting the bookkeeping services of a professional? Focus your time and energy on the areas of your company that you are truly passionate about.
Small business owners: What do you think? Do you currently do your own bookkeeping? If not, how is the task of bookkeeping being handled at your company? I would love to hear about any discussions or decisions that have been made in this area of your business and welcome your opinions and comments.
This post is originally from the CrunchSum blog and can be found here.