3 Reasons Profitable Businesses Need A Bookkeeper

Many times businesses come to us for bookkeeping services when they are struggling with their finances. Maybe they are not sure about their prices or something feels off with how they are paying themselves. We love helping these struggling businesses find confidence in their numbers and grow their businesses to be stronger.

The reasons struggling businesses may need a bookkeeper are clear but for profitable businesses, the reasons may be less obvious. After all, if a business is profitable, why need a bookkeeper?

Well, the answer is in the question - sometimes we assume our business is thriving financially when in reality we may be struggling. Without the help of bookkeeping, business owners may only be relying on what income is in the bank to determine whether they are profitable. This can lead to assumptions and misconceptions around whether they are truly profiting with every sale.

In the following article, we will illustrate the 3 ways a profitable business will benefit from a bookkeeper.

1 - Greater Insight

If your business is profitable but you offer many different types of services, you may know something is working but specifically, what? With a great bookkeeper, they can dive into the numbers, properly classify them, and provide you with information on what specific services are profiting your business.

With this information, you may find some services are more profitable than others. You may find some are generating you more revenue but also costing you significantly more, leaving you with less profit margin. All this information can be revealed with a great bookkeeper, then allowing you to make better business decisions.

This sort of information is essential for all big business decisions, especially for businesses that are growing. When deciding on the next big promotion, sale, or service to provide, this is going to be the information that helps you make the smartest decision when establishing a budget. It can help create historical data and forecasts to move you forward.

2 - Tax Compliant & Audit Proof

Bookkeeping is about so much more than making sure you have the right information to make business decisions. It can also provide you with the support you need to withstand an audit or quickly file your taxes on time. Both of these common scenarios require clean books and can often require knowledge of how things need to be done in regulation with the corresponding authority.

For example, to be tax compliant with the IRS you may be required to provide support for some expenses. A bookkeeper will be able to organize that support and make sure all appropriate documents are available when needed. Likewise, audits require plenty of support to be provided, which can be made available easily with the help of an experienced bookkeeper.

These same rules apply for a growing team. If your first hire is an employee from another state, there may be some tax documentation required to make sure you are in compliance with the IRS. As a growing business, you will want to make sure you are aware of everything that needs to be filed with each new hire.

3 - Time Management

If your business is growing and you are finding yourself in a profitable position, you likely are growing your team as well. As you begin to outsource some of the work, outsourcing your bookkeeping should be one of the first to go. Why?

As an experienced bookkeeper steps into your business, they will be able to provide you with much needed efficiency as more sales come in. As your business grows you will find your accounting processes are getting more and more complex. While your attention will likely be pulled in many different directions, being able to offboard your bookkeeping tasks to a trusted bookkeeper will help alleviate some of the work on your plate.

If your business is thriving you are likely in a position where more big decisions will need to be made in the near future. As the business owner, it is important the right people are doing the right job, which does not include business owners reconciling bank accounts.

As you grow, consider a bookkeeper as your next hire. Not only will you have better insight over how your business is running but you can confidently manage each new financial challenge that comes your way.