Every entrepreneur has to deal with the challenge of handling the accounting for their entity. However, not every entrepreneur needs the same thing when it comes to their accounting needs. Depending on the industry, bookkeeping can be very straight forward and as simple as entering in bank transactions where other industries rely on much more detail. In later posts we will discuss the accounting requirements for specific industries and business needs, however, in this article we will stick to more general aspects of evaluating your business.
The first step in evaluating what you need is to get a better understanding of what goes into bookkeeping and what your expectations are. I have met too many people who make assumptions about accounting and then make decisions that our based on misconceptions; do some research. The first thing I always tell people is you will pay for what you get. Bookkeeping is like anything else there are a lot of people claiming they are experts and few are really worth it. Entrepreneurs need to know what questions to ask when interviewing accountants.
The next step is understanding your business model and industry. As I have mentioned I will be going into detail about different industries and models in later posts. Your industry and model dictates many aspects of your business and your bookkeeping is one of those aspects. Lets say you are a retail location and you need a POS, a shift management system, and commission tracking. If you do not plan well you will end up with three completely different systems that do not integrate and will end up costing you money in the long run.
Evaluating your expectations is very important as well. There are two sets of expectations; the detail of information you require and the investment you’re willing to dedicate to your bookkeeping. You can not expect to have CFO level work at administrative prices. The more detailed bookkeeping and accuracy you require the more qualified person will be necessary.
Where does all this leave you? An educated choice that is well thought out will give the best end result. Entrepreneurs are faced with two options; hiring an employee or a Business Bookkeeping Service provider. Even though outsourcing is becoming a more popular choice there is still quite a bit of hesitation when coming down to making that decision. Hiring an employee is always the first thought when considering this need. However, a quality employee that you can rely on can be very costly.
Even though these options seem limiting if you’re creative you can find the right fit for you. I have seen business owner manage a multi-person bookkeeping department, outsource the entire department, outsource lower level tasks, or even outsource the management of the department. The ability to choose and mesh these different solutions gives you an avenue to meet your goals.
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