If entrepreneurs are looking for a way to save money in their business, they may opt to hire an accountant instead of Edmonton bookkeeping. That would actually be a big mistake because while both accountants and bookkeepers work on the finances of the business, they both do 2 very different things. Bookkeepers are tasked with organizing the day-to-day financials of the business including Accounts Receivable, Accounts Payable, keeping track of their cash and assets as well as the cost of goods sold, expenses, profits, and the overall revenue. The accountant is tasked with filing the fiscal year-end of the corporation, doing tax planning so that the business owner can minimize the amount of taxes they pay throughout the year, and business planning so that an entrepreneur can grow their business. It is vitally important that an entrepreneur actually hires both in their business to increase their odds of succeeding.
Since half of all Canadian entrepreneurs fail according to statistics Canada, and 29% of those failed entrepreneurs say that the reason why they failed was that they ran out of money. Only 11% of all entrepreneurs ever seek professional help. The hiring both an accountant and Edmonton bookkeeping, business owners can have great professionals that can help them make great financial decisions in their business that can help them avoid running out of money.
One of the reasons why hiring Edmonton bookkeeping is so important, is because it can cost a business owner far more to file their year-end financials with their accountant if they have not had a bookkeeper. The reason for this is because if an accountant has to organize all of the receipts and Accounts Receivable and accounts payable of a business, it is going to take them a lot more time, which they will charge out at their typical accountant’s fee. If they hire a bookkeeper, the bookkeeper will do it a little bit every month, at their bookkeeping fee which is much lower than an accountant. When a business owner takes the organized financial statements from a bookkeeper to their accountant, it takes the accountant even less time to finish their year-end, and a business owner saves money.
By allowing Edmonton bookkeeping to work on their financial statements month-to-month, can also eliminate inaccuracies. The reason for this is because a business owner will have a better memory of what each receipt is for, and the reason for it as well as be less likely to lose those receipts. By doing it every single month, a business owner will be able to enable their financial information to be more accurate and complete by having all of their appropriate receipts, and knowing what each one is for.
There should not be a decision between choosing between one or the other when it comes to bookkeepers or accountants, it is clear that entrepreneurs need both in their business in order to succeed in business and grow their company.
A statistic from Industry Canada says that 50% of all Canadian businesses fail and only 11% ever seek professional help, by utilizing both an accountant and Edmonton bookkeeping in their business, entrepreneurs can get the professional help that they need in order to grow their business.
One of the most important things that an entrepreneur can do in their business is to hire Edmonton bookkeeping, in order for them to be able to get interim balance sheets and interim income statements. By reviewing these statements on a monthly basis, entrepreneurs are able to see the cash they have available in their business as well as their revenue, and make financial decisions because of it. If an entrepreneur needs to buy a new asset for their business, they should not have to wait until they get the year-end financial statements from their accountant in order to make that decision. By looking at their interim statements from Edmonton bookkeeping, business owners will be able to make the determination if they have the money in order to make that asset purchase, or if they need to generate more revenue in order to do that.
Another way that reviewing interim financial statements can help business owners, is so that they can stay on top of their expenses on a monthly basis. A business owner may run the risk of running out of money in their business if they only review their expenses at the end of the year. By reviewing their balance sheet every month, they can take a look at if their expenses are going up or staying the same. A well-organized balance sheet will have the items in numerically dissenting order so that the most expensive items end up at the top of the list so the business owner can easily see what items they can minimize in order to make the biggest difference to their bottom line.
This is extremely important for business owners to get into the habit of as they are new in business because when an entrepreneur is able to start paying themselves, they need to review their interim financial statements in order to be able to figure out if they are making enough money to pay themselves. While organized interim statements allow business owners to see how much revenue is in their business, and if they can afford to write themselves a dividend check. If Edmonton bookkeeping helps them have organized financial statements, business owners will get into the habit of reviewing them before writing dividend checks to themselves which can help them immensely when they hire their staff for the first time and start writing payroll checks.
Business owners should understand that they do not have to make the choice and they should not between hiring a bookkeeper and an accountant in their business because both are extremely important professionals that can help them significantly make financial decisions in their business that can help them succeed. Utilizing a bookkeeper throughout the year and then an accountant at year-end are 2 important professionals that business owners should hire in order to find business success.