To succeed in business, one of your most important tools is financial analysis based on your business records. The importance of good records cannot be stressed enough. Accurate and timely financial records can help you answer some very important questions. Are you making money (or losing money)? How much? Is your business financially sound, or are there troubles lurking ahead? Bookkeeping is the process in which all valuable financial information is gathered and recorded. Using an outside bookkeeping service may improve your financial records and minimize your expenses at the same time.
To determine how much you spend on your bookkeeping, consider the following questions:
These questions may be difficult to answer, but answering them may help you realize the savings that can be achieved by letting someone else handle your bookkeeping chores.
Outside bookkeeping services already have the knowledge and equipment needed to for them to specialize in performing your bookkeeping for you. It shouldn't surprise you that they may be able to do your bookkeeping much cheaper and more quickly than you. Hourly bookkeeping rates generally range somewhere around $25 per hour. Selecting an accountant to do your bookkeeping will cost you more because accountants tend to offer a broader range of services. Your total monthly bookkeeping charge depends a lot on the type of services you request and the financial information you provide to the bookkeeping service. A copy of a neat and orderly check register, as opposed to a shoe box full of canceled checks and receipts, will require less work on the part of the bookkeeping service and lower your costs significantly. All in all, you should be able to get accurate and timely financial information from an outside bookkeeping service for less than $200 a month.
Using an outside bookkeeping service will also reduce your tax return
preparation fees since neat and orderly financial records make preparing a tax
return much easier. It also means that your tax return will be completed on
time, and without missed deductions. Poor financial records will certainly
result in your accountant charging you higher return preparation fees.