Congratulations – you’re a CEO – a “chief everything officer” that is. We know that you are super busy taking care of customers, and dealing with employees and vendors. As the “CEO”, you’re also tackling your own bookkeeping. Did you know that there are many misconceptions about keeping the books? I’ll share with you the 5 lies entrepreneurs believe about bookkeeping.
#1 – I’ll do it myself and have an accountant check it
If you’ve decided to take on the bookkeeping yourself, letting your accountant check your work, ask yourself these questions first.
Are you familiar with bookkeeping?
You know your business but you probably don’t understand bookkeeping. Your lack of bookkeeping knowledge may turn into costly errors later. Here at 5MinuteBookkeeping we give you over 60 free QuickBooks tutorials so that you can sharpen you bookkeeping skills. But, if doing your own books seems too overwhelming for you, then focus on what you can do best. Instead, hire a qualified accounting professional.
Will it cost more to have an accountant check it?
In many cases, it may be more efficient for an accounting professional to do your bookkeeping than for them to fix your bookkeeping errors. Some accountants may not want to fix your errors. Talk to an accounting professional first to see what they recommend.
#2 – Bookkeeping is just data entry, right?
Bookkeeping is no longer just manual data-entry
Today, bookkeeping is no longer just a standard data entry procedure. In fact, you can eliminate manual data entry by using integrated apps to initiate, approve, and even process transactions.
For example: Using apps on your smartphone, you can snap pictures of your credit card receipts and vendor bills. There are also apps for customer invoices, payroll, expense reimbursements and everything in between.
# 3 – My relative can do it
Finding a relative to handle your bookkeeping sounds like a good idea. But, before you delegate your bookkeeping to a relative, ask yourself these three questions.
- Do they have the necessary training, experience, and time to work on your books?
- Can they problem solve when problems arise?
- Will they still love me if things don’t work out?
It may not be a good idea to jeopardize your relationship with a relative – especially your spouse.
#4 – Bookkeeping is necessary only for tax time
Bookkeeping is not just for tax time. Your business needs reliable financial reports for other reasons like:
- Getting a loan
- Making good management decisions
- Managing profit and cash flow
Don’t use tax time as an excuse to procrastinate and work on your bookkeeping only once a year. There is a wealth of valuable management reports and key performance indicators you can get from QuickBooks by working on your bookkeeping on a regular basis.Bookkeeping is not just for tax time. Your business needs reliable financial reports... Click To Tweet
# 5 – QuickBooks will do my bookkeeping for me
No, unfortunately, QuickBooks will not do your bookkeeping for you. There are many automated workflows in QuickBooks – like connecting it to your bank and credit card accounts. QuickBooks also integrates with many apps that eliminate double-data entry. But, QuickBooks still needs regular TLC from you. Establishing a daily bookkeeping routine, like our Daily 5 in 5, will help you stay organized and on track.
Whether you choose to do your bookkeeping, ask a relative for help, or hire a professional, don’t fall victim to the 5 lies entrepreneurs believe about bookkeeping. Ask yourself the right questions so you can make the best decision for your business.