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Why Successful Bookkeepers Do Not Do Their Own Bookkeeping; Tips From The Tax Goddess

Why successful bookkeepers do not do their own bookkeeping; tips from the Tax Goddess

  • A bookkeeper would see many different scenarios,  options, and loopholes that they can help you and your CPA apply to your situation.
  • They would also help you with your month-end reconciliations by looking at the reports, not only from the bookkeeper standpoint, but also from the tax standpoint. They would  suggest changes that could be made in the current time frame to really reduce your tax bill in the future.
  • Bookkeeping is always a really big question for people, “Should I pay for it; should I not pay for it?” It doesn’t really matter what area of business you are in, you should outsource the stuff that you are not an expert  at doing, such as bookkeeping.

 

Hello everyone, this is Shauna, your tax goddess. We are in tax filing season for 2016.

Today, we are talking about why successful business owners do not do their own bookkeeping. Here is a perfect example: We had a client come in asking us to review their books. They had done their own bookkeeping through a bookkeeping program. There many programs available; for example, QuickBooks, FreshBooks, and Zero allow you to do your own bookkeeping without hiring an external bookkeeper or having your CPA do your books. The client turned in their set of books. They had negative expenses and had items on the balance sheet that really should have been expenses. The client didn’t even really understand the difference between the balance sheet and the profit and loss. And, the client said, “It took me about six hours a month to get this work done.” Our professional bookkeepers can do that in about an hour and half, allowing you to spend time talking to your clients and your customers, feet on the street. You could be out there working with the public to build relationships or you could  spend six hours a month doing something you absolutely despise and still having to have it corrected because it’s not quite right.

When hiring an external bookkeeper for your business, you would want to ask some questions: How long have they been doing this? Have they worked on other businesses that are in your same industry? How many clients do they have right now? You wouldn’t want a bookkeeper who has only one or two clients, unless they’re really big clients. Generally, a professional bookkeeper would have 15–50 clients. A bookkeeper would see many different scenarios, options, and loopholes that they can help you and your CPA apply to your situation.

I am a really big fan of having an external bookkeeper. Of course, Tax Goddess performs bookkeeping but we also have referrals to a lot of really great bookkeepers that can help you with day-to-day bookkeeping, as well as just end of month bookkeeping, for example, paying your bills. They could help you track who owes you money. They would also help you with your month-end reconciliations by looking at the reports, not only from the bookkeeper standpoint, but also from the tax standpoint. They would  suggest changes that could be made in the current time frame to really reduce your tax bill in the future.

Bookkeeping is always a really big question for people, “Should I pay for it; should I not pay for it?” It doesn’t really matter what area of business you are in, you should outsource the stuff that you are not an expert  at doing, such as bookkeeping. Outsource the stuff that is not your specialty. You outsource your insurance; you outsource your banking; and, you would never try and do your own financial planning. You have attorneys, bankers, financial planners, retirement experts, health insurance experts. Likewise, if you make widgets, go make widgets and outsource your bookkeeping.

You have experts surrounding you, and if you don’t have experts, find a team to support you. I am all about the team. 2017 is a huge year for team building. There are many amazing people out there, with amazing skill sets, who are all becoming independent contractors. If you haven’t watched our video on independent contractors, we will put the link to that video down below. So, definitely watch that because there are some changes that have happened just recently. Let us know if you have any questions.

 

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