Do you trust the numbers in your accounting system? For those who said no, how long do you think it would take to get your actual position in line with your books?
Here are some signs that your books might be screwy:
- You don’t run financial reports because they’re not accurate.
- You’re not reconciling your bank statement every month.
- You have a big garbage bag of receipts that need to be sorted and entered.
- You never know exactly how much money you have in your account.
- You can never pay your bills on time.
- You’re missing out on deductions because you’re scrambling to find tax paperwork.
As I tell my own clients, the level of effort needed to maintain good books depends on the systems you are able to put in place. I always say the best way to run a household is like a business, and this advice applies to both situations: It’s really important to have a professional help you with your books.
The most obvious reason is the expertise, but they can also be a buffer between you and your accountant — if that sounds enticing. A professional bookkeeper brings experience, and there are things that you might not know how to catch that are old hat to a bookkeeper.
If you foresee a need to borrow money for your business, or you just need financial statements for any number of reasons, you don’t want your books to show that you’re constantly putting out fires. A bookkeeper can help you categorize your expenses and help you make better financial decisions — whether you’re looking for a personal loan; want to do a refi; contemplating divorce; or doing an estate plan.
Technology is on our side. I can see exactly what I have in my checking account, what I have in my retirement account, what my house’s mortgage is worth, or if I have any loans. It doesn’t put together my net worth, but there are apps for that, as well.
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