Unlocking Cash Flow: Why Every Small Business Needs a Bookkeeper

If you’re a small business owner and you’ve been trying to do the books yourself, take a few minutes to understand why hiring a bookkeeper can be a game-changer for your small business.

We know that some of you out there continue to try and do everything in your small business, including all the invoicing, bookkeeping, and financial duties. But that should not be the case. If there’s one thing you should outsource or get some help with, it’s the financial aspects of your small business.

Hiring a bookkeeper to keep your business on track can be called mission-critical. Without detailed attention to your small business’s financial activity, cash flow can plummet quickly.

Reasons to hire a bookkeeper for your small business

A bookkeeper will improve your financial tracking and reporting

Your small business must have accurate records for a whole host of reasons. Not to mention reporting for tax purposes. If you’re serving customers, marketing your business and of course trying to have family time, the chances of you having inaccurate financial records in your small business are high.

A reputable bookkeeper will ensure all your financial transactions are recorded accurately and timely and provide a clear picture of your small business’s financial health. They can also generate detailed financial reports that help you, the small business owner, understand your cash flow patterns, identify any issues or challenges, and ultimately help you make informed decisions about finances.

Improving efficiency for invoicing and debt collections

If you’re just too busy to invoice, there can’t be a better reason to hire a bookkeeper. Your bookkeeper can manage all your invoicing and ensure that invoices are sent out promptly and accurately, which will help reduce the chances of any payment delays. Your bookkeeper can also set up a system for follow-ups and reminders on any overdue payments, increasing the likelihood of more timely payments and better cash flow.

Keeping an eye on your small business cash flow

An experienced bookkeeper can help you create a reasonable budget and cash flow forecasts, which can allow you and your business to anticipate and plan for any future cash needs. A bookkeeper can also help you manage your expenses by monitoring those expenses closely. That qualified bookkeeper can identify areas where costs could be cut or optimized in an effort to improve your overall cash flow.

A bookkeeper helps improve cash flow

We just mentioned keeping an eye on your small business cash flow but the right bookkeeper can also help you improve it. They can help you streamline the accounts receivable process by implementing efficient invoicing systems and they can track those outstanding invoices. Your bookkeeper will also help keep the proper records so when the event of debt collection procedures, you’ll have the proper documentation. And your bookkeeper can work closely with your CPA, because that’s also a necessary component of your small business, to analyze financial data and identify any trends that could negatively affect your business.

Managing credit and collection activity

When you work with a bookkeeper, that professional can help you establish and enforce your credit policies including analyzing and setting credit limits for certain customers and those terms to mitigate any risk of non-payment. When customers get to a point where they have not paid and you need to initiate debt collection activity, that qualified bookkeeper can help manage that process with a reputable debt collection agency.

Compliance, risk management and necessary filings

Your bookkeeper will help ensure your small business complies with any relevant financial regulations and can mitigate any fines or penalties, which can only further strain cash flow. Your bookkeeper will also help you stay on track with any tax filings, fees, licensing fees, and other important factors to keep you compliant at all levels.

Implementing the latest technology for small business bookkeeping

Your bookkeeper can advise you on the right accounting software to purchase and help you set up the systems to ultimately automate in some form and even streamline your financial processes. When you use proper accounting software, you reduce billing errors, and you save time and money. You’ll also be able to generate accurate reporting for any number of interested parties, such as your CPA and federal state regulations.