Your taxes have been filed, and you feel a sense of relief. You don’t have to go through that wearisome process of gathering receipts and paperwork until next year! YAY! Throw a party, use your tax return in a silly way, and do whatever it is that makes you feel happy that it’s all over for another year.
But WAIT! Don’t get too comfortable. I’m willing to bet the “end of year craziness” has taught you a few things. In fact, are you willing to go through the same process next year that you just experienced this year?
If you haven’t figured it out by now, here’s something you need to know: BOOKKEEPING IS AN INTEGRAL PART OF MANAGING YOUR BUSINESS. It’s not something to be taken lightly or only thought about at tax time!
In fact, maybe now is the BEST time to rethink your process. What could make it less of a hassle next year? What can you start doing right now to put systems in place to save loads of time (and money) when the 2010 tax season rolls around?
Now that we’ve agreed that you should make some changes, what next? How do you decide if you can set up and do the books yourself, or if you should hire help?
Based on qualities I’ve seen in my clients over the years, I came up with 9 categories that will help you explore whether you should hire help:
a. Do it yourself if: You love when everything has its place and is easily found. You keep a tax file year around.
b. Hire help if: You have receipts stuffed in every purse pocket, coat pocket, nook and cranny. It took a while to gather them all for your taxes!
2. Filing and record keeping:
a. Do it yourself if: You have a groovy system in place for business paperwork.
b. Hire help if: You are a “go with the flow” person. Someday you will sit down and sort through the whole mess&probably in January or February 2011, just in time for taxes again!
a. Do it yourself if: Schedules are awesome, you love to plan ahead.
b. Hire help if: Life doesn’t happen on a schedule&..but you should realize that taxes are due on the SAME day every year!
4. Current filing drawer:
a. Do it yourself if: You can open it with ease, and the folders are labeled nicely.
b. Hire help if: When you open it, the receipts spill all over the floor. Oh, and you found some that should’ve been on the 2008 tax return
5. My computerized records:
a. Do it yourself if: You have QuickBooks installed, and love entering all your transactions on a regular basis. Your tax accountant loves it too&.
b. Hire help if: You bought QuickBooks based on the recommendation of your frazzled tax accountant. Now what?
6. My bank reconciliations:
a. Do it yourself if: They are done the day you receive the bank statement, and you get geeked when they reconcile to the penny!
b. Hire help if: You have to ask “what’s a bank reconciliation?” You get statements from the bank and stuff them in a folder where they are forgotten. You write checks based on what the bank tells you the balance is when you call!
7. My plan for year end:
a. Do it yourself if: You print out QuickBooks reports for the tax return.
b. Hire help if: You have a box where you throw every paper received. You hope the tax accountant will work on her magic powers to sort it all out for next year!
8. When I think about bookkeeping:
a. Do it yourself if: It sounds fun. You love that you know what Accounts Receivable is at any given time.
b. Hire help if: You would rather _____ (fill in the blank) than sit down and do the bookkeeping!
9. What my time is worth:
a. Do it yourself if: Your bookkeeping takes only a few hours a week. You know exactly what my financial situation is right now.
b. Hire help if: Your time is worth way more than what you’d pay a bookkeeper to keep your organized, you just haven’t realized that yet&
If you are a “do it yourself” bookkeeper, you can keep your own books until it hinders your business growth. If you want to be more successful in your business, you will reach a time when you have more high value activities to complete. Then it will be time to hire a bookkeeper.
If you are the business owner who is waiting for tax season again to get your books together, you need to be realistic about where your strengths are. Find a local Quickbooks Proadvisor or CPA to help you put a system in place.
I know “But, Rebecca, it’s too expensive to hire bookkeeping help!”& My answer & it can be much more expensive NOT to hire help.