Your taxes have been filed and you feel a sense of relief. You don’t have to go through that tedious process of gathering receipts and paperwork until next year! HURRAH! Throw a party, use your taxes in a silly way, and do whatever makes you feel happy that it’s all over for another year.
Goal WAIT! Don’t get too comfortable. I’m willing to bet that “year-end madness” has taught you a few things. In fact, are you willing to go through the same process next year that you just experienced this year?
If you haven’t figured it out yet, here’s something you need to know: ACCOUNTING IS AN INTEGRAL PART OF MANAGING YOUR BUSINESS. It’s not something to be taken lightly or thought of only at tax time!
In fact, now may be the BEST time to rethink your process. What could make it less complicated next year? What can you start doing now to put systems in place that will save you lots of time (and money) come tax season 2010?
Now that we’ve agreed that you need to make some changes, what’s next? How do you decide if you can set up and do the books yourself, or if you should hire help?
Based on the qualities I’ve seen in my clients over the years, I’ve come up with 9 categories to help you explore whether you should hire help:
1. Organization:
has. Do it yourself if: You love it when everything has its place and is easy to find. You keep a tax file throughout the year.
b. Hire help if: You have receipts stuffed in every purse pocket, coat pocket, nook and cranny. It took a while to get them all together for your taxes!
2. Filing and record keeping:
has. Do it yourself if: You have a wonderful system for business paperwork.
b. Hire help if: You are a “go with the flow” person. Someday you’ll sit down and tidy up the whole mess, probably in January or February 2011, just in time to pay taxes again!
3. Hours:
has. Do it yourself if: Schedules are awesome, you love to plan ahead.
b. Hire help if: Life doesn’t run on a schedule… but you need to realize taxes are due on the SAME day every year!
4. Current File Drawer:
has. Do it yourself if: you can open it easily and the folders are well labeled.
b. Hire help if: When you open it, receipts spill all over the floor. Oh, and you found some that should have been on the 2008 tax return.
5. My computer records:
has. Do it yourself if: You have QuickBooks installed and love to enter all your transactions regularly. Your tax accountant loves it too&.
b. Hire help if: You bought QuickBooks based on the recommendation of your depleted tax accountant. Now what?
6. My bank reconciliations:
has. Do it yourself if: They’re ready the day you get the bank statement and go nuts when they reconcile to the penny!
b. Hire help if: You have to ask “what is a bank reconciliation?” He gets statements from the bank and puts them in a folder where they are forgotten. You write checks based on what the bank tells you the balance is when you call!
7. My plan for the end of the year:
has. Do it yourself if: You print QuickBooks reports for tax filing.
b. Hire help if: You have a box where you throw away every piece of paper you receive. You hope that the tax accountant will use her magical powers to solve everything for the next year!
8. When I think about accounting:
has. Do it yourself if: Sounds like fun. You love knowing what Accounts Receivable is at any given time.
b. Hire help if: You’d rather _____ (fill in the blank) than sit down and do the accounting!
9. What is worth my time:
has. Do it yourself if: Your bookkeeping takes only a few hours a week. You know exactly what my financial situation is right now.
b. Hire help if: Your time is worth a lot more than you’d pay a bookkeeper to maintain your organization—you just haven’t figured it out yet&
If you’re a do-it-yourself bookkeeper, you can keep your own books until it gets in the way of growing your business. If you want to be more successful in your business, there will come a time when you have to complete more high-value activities. Then it will be time to hire a bookkeeper.
If you’re a business owner waiting for tax season to organize your books again, you need to be realistic about where your strengths lie. Find a local Quickbooks Proadvisor or CPA to help you implement a system.
I know: “But, Rebecca, it’s too expensive to hire accounting help!” & My answer & it can be much more expensive NOT to hire help.