How to Save Money with Bookkeeping Cleanups
Accounting for the self-employed is often overlooked and not prioritized, especially for a start-up. Many new entrepreneurs are spending time generating revenue instead of taking care of their finances. When they finally realize the need for it, they end up hiring a CPA or a bookkeeper which can be expensive if not done at the right time.
Here are 3 ways to reduce the cost of bookkeeping cleanups:
- DIY your accounting and bookkeeping
- Work with a small boutique firm
- Hire Early
Why are Bookkeeping Clean ups Important?
There are many things that self-employed, women-owned businesses need to take care of which can be overwhelming at times. One such task is that of accounting and bookkeeping where it is necessary to have a systematic approach with consistent reconciliations. For this reason, it is better to implement a system from the beginning than wait.
Bookkeeping is one of the most important parts of running a business. But when you are self-employed or running a start-up, it can be hard to keep up with it.
DIY Your Accounting and Bookkeeping
The good thing is that there are many tools out there to help you do your own bookkeeping. Here are some steps that you should take before you start this process:
- You should start by gathering all the receipts and invoices that are related to your business.
- Once you have gathered these items, you will need to organize them into the appropriate categories so that it is easier for you to track the expenses and revenues for your self-employed business.
The good news? You don’t have to be intimidated by bookkeeping anymore! There are plenty of reliable and affordable ways to keep your books clean. From using an online software like QuickBooks Online, QuickBooks Desktop, FreshBooks, or Xero to do your bookkeeping for you – there is no shortage of ways to get this done!
Businesses, like Truly Bookkeeping, also provide a number of resources for those looking to get started. We recommend checking out our Truly Profit Plan.
The Truly Profit Plan is perfect if you are looking for a simple way to:
- Create A Budget
- Manage Cash Flow
- Ensure you get paid
To learn more about how the Truly Profit Plan can help your business, click here.
Work With A Small Boutique Firm
A lot of women-owned businesses are unaware that they can hire a bookkeeping firm to do their bookkeeping cleanups instead of hiring a CPA and save a significant amount of money. What is a CPA and how much do they cost?
- A Certified Public Accountant (CPA) is an accountant who has passed a certification exam. These professionals are qualified in many areas and can often be necessary for big business issues like bookkeeping for corporations or assurance planning.
- The cost of hiring an CPA depends on many factors, such as your location and the type of services you need. A CPA can charge anywhere from $150 to $300 per hour.
Hiring a bookkeeping firm instead of a CPA could be cheaper because:
- Bookkeepers are less expensive and can sometimes be even more qualified than CPAs. While CPA’s certainly have great credentials and are needed, if they spread their time across many activities rather than specializing in bookkeeping, they may not be equipped for every challenge you throw at them.
- Bookkeeping firms usually charge less than CPA firms. If you were to go with a CPA firm, you could be overpaying for tasks that could easily be done by a bookkeeper.
It is not uncommon for small business owners to hire a bookkeeper to keep their books clean throughout the year and then hire a CPA for tax time.
The best way to save money on a bookkeeping cleanup is to hire early. The longer you delay hiring a bookkeeper the bigger the mess can get and the more work you are doing for a bookkeeper down the road.
Rather than paying a small fee upfront, you are kicking a snowball that can turn into a big expense! Regardless of whether the work is done today or in a year, oftentimes the same amount of tasks will need to be completed by an accountant.
This also does not consider the advisory benefits you will receive from having updated financial statements. Yes, hiring a bookkeeper too late will be a costly cleanup but the lack of financial knowledge could cost you even more.
We have discussed the 3 main ways a bookkeeping cleanup can save you money but it is important to note, it is not just the cleanup that saves you money. Bookkeeping itself is a proactive way to look after your finances and ensure healthy financial growth for your business.
If you are ready to begin cleaning up your bookkeeping, we recommend checking out our latest offering – 25% off $400/month cleanup with a 12 month bookkeeping contract.