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When new businesses start up, the owner either doesn't keep up with the bookkeeping due to wearing so many hats or tries to do it themselves to save money.
Their skills and abilities are in the service or product they offer and produce. Most of the time, they are in the production and sales areas of the business. They should not be in the treasury area as it's not their expertise. What happens is, they either do it erroneously or don't do it at all and the transactions accumulate.
They should not be in the treasury area as it's not their expertise. What happens is, they either do it erroneously or don't do it at all and the transactions accumulate.
One of the reasons is, they do not think they have enough transactions to hire someone. The truth is, most small business owners are using personal money to fund the business and they are mixing personal and business expenses in the accounts. This is why it needs to be handled a certain way and by someone who knows what they are doing.
Once the business has grown, once things become very busy, and once the owner believes they have the funds for a bookkeeper - they seek out help. Usually tax returns or some other urgency prompts this desire to hire.
At this point though, the books are a mess. 9.5 out 10 times, the books are in a complete confusion. The quote from the bookkeeper can be in the thousands because there is usually more than a year to clean up and this causes the entrepreneur to be in shock over the sticker price.
At this point though, the books are a mess. 9.5 out 10 times, the books are in a complete confusion.
It is often not understood what it takes to "clean up the books". Not only does it require a level of expertise and confront beyond the regular bookkeeping, it is hours and hours of a full time project to get the job done. Pulling apart all of the errors and fixing the financial data within each area of the software, is a complex job that takes expert knowledge and skill.
I've personally seen books in such a disarray that the quote was beyond $10K. Yes, you heard me right. That is why we are so passionate about getting start ups to hire us at the beginning so we do not have to quote that amount of money which most small businesses cannot afford.
That is why we are so passionate about getting start ups to hire us at the beginning so we do not have to quote that amount of money which most small businesses cannot afford.
Clean ups can also result from the business owner trying to hire someone "cheap" (such as a foreigner) or someone who just started their bookkeeping business and who lacks experience and knowledge but yet is certified as a Quickbooks Proadvisor. Trust me when I tell you, I've offered internships to both and the quality control that I had to implement for the errors discovered was a weekly hat worn by myself.
An experienced bookkeeper is well worth the money in the beginning. You will not only save money in tax returns but also in not paying thousands for a clean up later on. In addition to that, not all bookkeepers are the same. I recommend getting one that helps you analyze your expenses and create financial strategies for growth.
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