One of the most important decisions that a business owner makes in their business, is hiring the right Edmonton bookkeeping services and accounting team for their business. Many entrepreneurs do not understand the importance of having both of bookkeeper and an accountant in their business. However, business owners should understand that by hiring a great financial team in their business, they cannot only avoid one of the three biggest reasons why entrepreneurs fail, which is running out of money, but they can ensure that they are getting the most up-to-date financial information about their business, that can help them make great business decisions and be proactive in their business to become successful.
Business owners should understand the difference between Edmonton bookkeeping services and accounting services. While accountants work on the financial year-end of a corporation and are responsible for business planning as tax planning, to help entrepreneurs have a plan on how to be successful and minimize tax payments, entrepreneurs should know that a bookkeeper helps keep the finances of the business organized throughout the year, so that business owners can make great business decisions. For example, if a business owner wants to gauge how successful their marketing campaign is, all they need to do is look at the revenue on their balance sheet. If a business owner would like to be able to purchase an asset in order to grow their business, they can review their income statements to see if they have the money to do so. Any business decision that an entrepreneur makes can be strengthened by reviewing these interim financial statements.
When they are hiring Edmonton bookkeeping services, this is owners should be asking several questions in order to find not only a great bookkeeper but a bookkeeper that an entrepreneur is going to be comfortable working with in order to help them make the best business decisions possible. Because of this, entrepreneurs should be asking how much experience a bookkeeper has. Since there is no governing body and anyone can call themselves a bookkeeper, business owners need to be very aware and they are hiring the right bookkeeper for them. Different aspects of a bookkeeper’s experience that can significantly impact their ability to do a great job include if they have experience working in a public accounting office and if they are going to school to get their CPA designation. All these can speak to the depth of experience that bookkeepers have that can aid them significantly in doing a great job.
Entrepreneurs also tend to hire bookkeepers based on an hourly fee. While it is a good idea to always be mindful of price, rather than hiring a bookkeeper with a low hourly fee, business owners should perhaps consider hiring bookkeeping companies that charge a flat fee monthly this way, business owners can plan around that bill, and budget for it which can help them positively impact the cash flow of their business. Any time an entrepreneur can automate a bill, that better for their business.
Business owners may not understand how important a great Edmonton bookkeeping service can be for their business however, entrepreneurs should consider the statistic from industry Canada that says half of all Canadian entrepreneurs fail within their first five years of business, and 29% of those failed entrepreneurs say that the reason why they failed is because they ran out of money in their business. This can be a statistic that is impacted significantly by hiring the right bookkeeper in a business.
The reason the right Edmonton bookkeeping services can impact the cash flow in a business is that a great bookkeeper should be providing regular interim financial statements to an entrepreneur on a regular basis. These financial statements can help entrepreneurs make informed business decisions. For example, if a business owner needs to increase revenue-generating activities in their business, they need to look at their balance sheet and income statement to see if their revenue is dropping. If they want to see if their new marketing initiatives are working, again looking at these financial statements can help business owners see if they’re effective. If a business owner wants to purchase an asset, they should be looking at the statements in order to verify if they have the money or not. If they make any of these decisions without first becoming informed of their financial states, they could either make the wrong decision that ends up having the business owner be financially strained or running out of money or it may cost the business owner to not be proactive enough to increase the revenue in their business in a timely enough manner that could force them to have to close their business.
Therefore, when hiring Edmonton bookkeeping services for their business, business owners should be considering how skilled their bookkeeper is, instead of how much their hourly fee is. The hiring a less skilled bookkeeper, entrepreneurs made cost themselves far more in additional fees then they save in bookkeeping charges.
Entrepreneurs should be confident enough to interview potential Edmonton bookkeeping services that they are thinking of hiring, in order for them to get a good feel not only the level of experience that the bookkeeper has but how well the bookkeeper and the entrepreneur will work together in order to be able to make great financial decisions together. Business owners should be asking potential bookkeepers how often they expect to communicate with the business owner. While there is no correct answer here, business owners should understand that the more communicative the bookkeeper is with the business owner, the better information they are going to have. The business professionals at always bookkeeping send out the interim financial statements to their clients biweekly, not only sending those reports but also phoning those clients in order to answer any questions and explain them. This is extremely important to entrepreneurs who pay their staff biweekly because they’re getting the information of how much money they have prior to disbursing payroll.