When some people think about bookkeepers, they think about boring nerdy people who take receipts and enter them into Quickbooks or cut customer invoices. While this is a part of what a bookkeeper can do for your small business, limiting them to these simple tasks is a huge missed opportunity. A bookkeeper has their finger on the pulse of your business – the financials. Without healthy financials, your business isn’t healthy. Here are ways that a qualified and experienced bookkeeper can help your small business succeed and grow!
In small business, cashflow is one of the most important things you have to manage well to succeed. If you’re a big business with deep pockets maybe you can afford to let your accounts receivables sit for a month or two, but when you’re a small business you probably need to get those monies in because you’ll be quickly paying them out to cover your cost of goods and overhead.
A bookkeeper can help track your business cashflow and help a small business owner understand how the business is performing. Your business might be cyclical or seasonal – if you’re a Mississauga based landscaping company then you probably shouldn’t expect a lot of activity between November and April – a bookkeeper can help you understand the ebbs and flows of your business activity and what is normal and what might be cause for concern.
Are You Marking up your Cost of Goods Enough?
Whether you’re a products or services based business, you have to understand what the cost of goods is for what you sell and make sure that there is enough markup between what it costs you and what you’re selling it for to cover the overhead of your business and make your business profitable.
Let’s say you’re selling widgets. The widget costs you $1 and you sell it for $1.25. Your markup is 25%. You might think that every time you sell a widget you make $0.25 but have you considered all of the overhead expenses that you need to pay to make that $0.25? Do you have office or warehouse space that you need to pay rent on? Do you have a sales team and warehouse staff that need to be paid? Can your business afford to expand and sell more widgets or different types of widgets?
And this doesn’t only apply to products based businesses – service based businesses have cost of goods, too, except it isn’t for tangible products but rather the cost of paying the workers who are providing those services and any associated expenses like vehicles, tools and insurance.
A good bookkeeper can help look at your business to make sure that you’re making enough markup to cover your overhead expenses or that you have high enough volume to sustain your business.
Growing Your Business
Most small business owners want to grow their businesses. It’s an investment that you want to support you into retirement, either through profits generated by the business or the sale of the business. In most cases, growing a business doesn’t just happen by accident: as the business owner you have to commit to continuously finding more and more customers or offering new products and services. Sometime you might need to get a bank loan or line of credit to support your growth plans – a bookkeeper can help make sure your business books are in order to withstand the scrutiny of the lender and can also help make sure that your business is growing as expected once you do launch into that growth phase.
To get the most value out of your bookkeeper you shouldn’t just use them for entering data into Quickbooks or other accounting package that you use. A qualified and experienced bookkeeper can provide so much more value in helping you understand and manage the financial workings of your business, both today and in the future if you are actively looking to grow your business.
Simply Bookkeeping1 provides professional bookkeeping services for freelancers, solopreneurs and owners of unincorporated and incorporated businesses. We customize our services based on your needs – we only see some of our clients a few hours a month but others we see on a more regular basis. Our services are reasonably priced and we tightly track the amount of time we spend working for you so you only pay for the services you get.
To learn more about us, please visit our website at www.simplybookkeeping1.com or contact Michele Hyde by phone at (647) 668 – 9363 or by email at firstname.lastname@example.org.
Have Your Say
If you are trying to understanding the finances of your business or working on a growth plan, we’d love to hear from you. Tell us what’s on your mind and share your thoughts! Also, please share this article using the social media share buttons – chances are there are others out there dealing with the same issues!