Many entrepreneurs do not understand why they might pay more money to an Edmonton bookkeeping when they already pay money for an accountant. However, business owners need to understand that a bookkeeper can do several things for an entrepreneur that accountants may not do, or they can do but they will charge accounting rates for, then business owners can get a bookkeeper to do it and pay significantly less to get it done.
One of the things that are Edmonton bookkeeping can do for entrepreneurs that accountants can do, but will charge more for is organizing the finances of a business. A very common scenario that accountants see is a business that comes in with the bagful of receipts as there filing system, and the accountant has to go through the entire thing and organize it. Accountants charge much higher fees per hour then bookkeepers do, so even though an accountant will be able to take care of this task for business owners, it may take them much longer, because they are busier, and it can end up costing the business owner for more. If they take it to a great bookkeeper, they will be able to organize it more easily, and much lower cost. If business owners want to be really proactive, they can hire a bookkeeper to organize their financial information on an ongoing basis, so instead of having a giant bag of receipts at the end of the year, they are bookkeeper can stay on top of it throughout the year, allowing business owners to not only be more organized, but be less likely to lose receipts, and be more likely to remember what those receipts are for.
Another reason that business owners should hire Edmonton bookkeeping even though they have an accountant, is in order to get interim financial statements. An accountant will be able to help a business owner gets financial statements 6 months after doing their fiscal year-end, but that is less likely to be helpful to entrepreneurs. The reason for that is because, by the time an entrepreneur gets financial statements from their accountant, some of the information in that financial statement is 12 to 18 months old. If an entrepreneur wants more current financial information in their business, hiring a bookkeeper in order to deliver them interim statements can help a business owner understand what is going on in their business throughout the year.
By staying on top of their financials throughout the year instead of just a year-end can help entrepreneurs make better financial decisions throughout the year. A lot of decisions that entrepreneurs need to make need to be made at the moment, and not wait for their fiscal year-end and then 6 months later in order to get the financials from a year ago so that they can make a decision. A lot of decisions that need to be made include if they should hire employees, should they be laying them off, should they buy that asset they need to grow their business and do they have enough revenue in their business to pay themselves as well as employees.
If entrepreneurs do not know the difference between an accountant and Edmonton bookkeeping, they may not understand why they should pay for both. While it is true that accountants can do the same tasks as a bookkeeper, accountants are generally focused on different priorities, and therefore if they take on the tasks of a bookkeeper, they will charge out accounting rates, and end up charging the business owner far more money than they could have been charged if they simply went to a bookkeeper first.
One of the reasons why entrepreneurs should hire Edmonton bookkeeping is because they will be able to get financial statements throughout the year. An interim balance sheet includes information such as the cash in the business, Accounts Receivable, Accounts Payable and what the assets are. The interim balance sheet will work hand-in-hand with an interim income statement, that includes the revenue of the business, the cost of goods sold, expenses and profit of the business. A well-organized income statement is easy to read because it has simplified expense accounts, and is on one page. It is important to have this information because the business owner will be able to easily read it and make financial decisions. The expenses will be a numerically dissenting order, so that the owner can see that the most expensive cost items are at the top of the list. This is important because business owners need to always be aware of the expenses in their business, and what they can do to minimize them. By looking at the top half of the income statement, business owners can easily see what expenses can be reduced the most with minimal effort.
These interim income statements that are received by the entrepreneur can also help them understand how much revenue they are making in order to pay themselves as well as their employees. Edmonton bookkeeping says if the business owner waits to get their financial statements from their accountant, they will be less likely to make good decisions about when to pay themselves, and how much to pay themselves.
By utilizing an Edmonton bookkeeping throughout the year helps business owners make better financial decisions, which can help them avoid common reasons that entrepreneurs fail in business such as running out of money. Since 50% of all entrepreneurs are out of business within 5 years, making better financial decisions can be the difference between succeeding in business and failing in business. If entrepreneurs are serious about wanting to grow their business, they should hire bookkeepers throughout the year to work in conjunction with their accountant. Once they do that, they will be able to build a successful business and avoid the most common reasons why entrepreneurs in Canada fail. We would love to get the chance to help you with any and all of your accounting and bookkeeping needs. If you are interested go ahead and give us a call today!