Bookkeeping. The word itself can send shivers up the spine of the small business owner. It can be a terribly tedious task that no-one likes, but we all know should happen. Your bookkeeper is either incredibly unappreciated or they are terrible at their job.
I am my own bookkeeper, and honestly I fall into that second category. Bookkeeping is the worst thing and I put it off till the year end (making it even worse). The effect of which means I often end up missing out on all the best deductions as well as filing everything with the government (like taxes) at the last possible moment. This is the worst thing anyone can possibly do.
There really isn’t any magic pill or spell that will fix your broken bookkeeping come the end of the year. Getting caught up is your only option and the headache that will ensue is your reminder to fix the system so you don’t do it again next year. Getting caught up for me means spending a few very stressful days finding every single receipt that I didn’t throw away and entering them into my accounting system. Photocopying the ones that might fade. Hoping I can read the ones that have already faded. Basically its the worst thing. Anything, including the dishes or beating ones head against a brick wall for fun or profit is more fun.
The race for receipts is unavoidable at this point, you’ve fallen behind on bookkeeping and without those receipts you cannot prove your expenses and your pretty much out of luck. So, just do it. Once finished you need to fix the system that so this isn’t repeated year after year.
So that is what I have done. I have contracted out a bookkeeper. Looking for one proved to be fairly simple (Google, my best friend) and honestly they are far cheaper than I would have imagined. If you have fairly simple expenses (and most small businesses do, or should) and you update your bookkeeper whenever you make purchases or bill people you will find that a bookkeeper will only cost you a few hundred dollars a month. This is honestly the best investment you can make in your business.
For only a few thousand dollars a year you completely eliminate the receipt dance. You also eliminate the headache and days of emergency bookkeeping. For that small investment, my life is 100 times better. Quite honestly if you have a great bookkeeper you need to appreciate them, they are making your life so much better. And if you or your bookkeeper keeps messing up and making your life more complex than it needs to be, get that fixed! A good bookkeeper should only need a few hours a month to manage simple books and they should be able to accomplish that with almost no input or direction from you.
Also, FYI, listen to your good bookkeeper. They may provide advice for how to organize the information you submit to them, if so, follow it. This advice isn’t meant to make your life more complex it is meant to save you money and keep your business above board and audit resistant.
I’ll be providing some updates over time as my bookkeeping experiment continues…