When should you move your small business from do-it-yourself bookkeeping to using an accounting and bookkeeping service?
Running a small business is hard. Really hard. It's so hard that most people who have never run a small business could never understand how hard it is - and if they ever did understand, they'd convince themselves never to run a small business.
As a small business owner you're constantly pulled between 'doing' your business and 'managing' your business. You have existing customers to service, new customers to find, people to organize, and money to bring in. But you also have to manage that money, make sure bills and people are paid on time, work out your tax liabilities - and work out how to keep your business moving forward financially. When you get large enough as a business you might be able to hire people to run the management side of your business for you, but for the majority of small businesses, having people on staff just to crunch the numbers and provide insights when you need it (and keep the bills and people paid) isn't really cost effective or - for most small businesses - even affordable.
Most small business owners start their business because they're passionate about what they do, or they have a particular skill or experience that they're an expert at. They're rarely a 'business person' who went to 'business school', is an 'expert in business' - and then decided to start a business. If you're a business owner who worries that they're lacking in business knowledge, or feel like you're 'making it up as you go' - then you're in very good company.
Luckily for those 'making it up as they go' small business owners (which is nearly all of us), there's a growing number of excellent accounting, bookkeeping and payroll software applications out there which are designed to be easy to use and are entirely focused on non-business-person business owners. These software applications such as Wave, Freshbooks, Zoho Books, Quickbooks, Xero and Wagepoint are all really designed to simplify the process of running a small business. Gone are the days of writing your business transactions in a paper book and sending paper invoices - most business owners now use a digital version which they manage themselves in a do-it-yourself kind of way and automate as much of it as they can.
What these applications help with is creating simple business processes that you can quickly learn - from sending invoices with one click to automating receipts, to checking your bank feed and highlighting possible accounting errors. But there comes a point in any successful small business when the do-it-yourself business processes that used to make you feel in control start to become forgotten and out of control. You're too busy. You haven't reconciled your expenses in months. Your sales tax bill was waaaaay more than you ever budgeted for. You forgot to pay an important bill on time. You forgot to invoice your biggest customer - and now your cashflow is hurting. You're worried about making payroll or paying a contractor. You're definitely paying too much tax. You don't even know how to start a conversation with your bank about getting a line of credit, or you're not sure what part of your accounts you need to show them to increase your limit (do they want to know Gross or Net Revenue? Actually what is the difference between Gross and Net?! Let me Google it...).
If this is ringing any bells, then it might be time to look for some support in the 'managing' part of your business. It's a good problem to have - after all it means you're experiencing the growing pains that come from success! For many small business owners this is the most important and cost effective decision they can ever make. Getting time back to grow and build your business rather than burning precious time trying to master 'accounts payable'. Being able to do the thing you're passionate about, rather than staring at a spreadsheet after dinner. Getting contacted by future customers rather than being chased by an unpaid supplier or contractor.
If this sounds like a dream come true, then you really need the support of a cost-effective bookkeeping service.
Found this useful? You could get a free weekly insights report delivered to your inbox each week full of relevant insights - if you'd like to receive a copy, you can sign up here.
What is huumans?
A 'Modern', cost-effective bookkeeping service designed specifically for small business owners, huumans provides same or next business day support, guaranteed weekly reconciliation and fixed, transparent monthly pricing. Your business numbers, directly calculated from your constantly reconciled accounts, are presented in a free, easy-to-understand, on-demand, shareable dashboard - and like your billing, it can be managed online whenever you find it convenient. Offering the most cost effective small business managed payroll services in Canada, we also provide specialized discounts for startups and new businesses, along with dedicated solutions for franchises.