Bookkeeping: Misconceptions vs Reality
Updated: Feb 7, 2022
Misconception: It will take a lot of time.
Reality: With an understanding of the right software, such as Quickbooks Online, most small businesses can do their bookkeeping in as little as 3-6 hours each month. This is dependent on the complexity of your business, how you pay bills, track time, and invoice clients.
Misconception: You need to be good with numbers to do your own bookkeeping.
Reality: An eye for detail will help you, but the right software will do all of the calculations behind the scenes.
Misconception: You have to have a business degree to do your own bookkeeping.
Reality: You don’t need a finance or business degree, you need time management; Time to focus on being the CEO of your business; Time to learn how to use the proper software; Time to be curious about your numbers.
Misconception: It’s expensive to hire a bookkeeper
Reality: It will cost a lot more for you to not understand what your money is doing. Hiring an accountant at several hundred dollars an hour is more than it will cost you to take the time yourself.
Costly mistakes: Having your things up to date monthly will allow you to make adjustments throughout the year and have a handle on your money before it's too late. If you haven’t taken the time to look at your money, you are likely spending more than you can afford.
Misconception: It’s scary to have someone look at my numbers; I'm afraid to be judged
Reality: Taking on a bookkeeper demonstrates that you care about your money, you are money conscious, and if you are having money troubles you are being proactive and trying to fix it. The right bookkeeper will be happy to help you correct the course of your business. That’s our job. Every time I’ve had a client come to me when they are in financial trouble, I know they’ve overcome the challenge of seeking help, and I feel hope for them and the future of their business.
Misconception: My business isn’t big enough to need a bookkeeper.
Reality: It’s actually better to hire a bookkeeper before you feel like you need one. They can help you put important systems in place for your business, like receipt tracking, filing your estimated taxes, tracking invoices, paying bills & vendors, and regularly reviewing your finances.
Misconception: I’ll just wait until I file to pay all of my taxes, no big deal.
Reality: Most people believe that paying one lump sum at tax time is the same as paying Quarterly Estimated Taxes. Not true. You actually pay interest and penalties if you haven't paid out enough taxes each quarter. You can work with your bookkeeper to set up a schedule and set money aside to pay your quarterly taxes on time and avoid these extra fees.
Misconception: My accountant will put together my information at the end of the year.
Reality: It takes 2-4 weeks to catch up with overdue bookkeeping, and this will be costly to you. Make regular bookkeeping a priority. But, if this is something you just don't want to do there are many bookkeepers out there waiting to help you!