2: How Do I Know If I Am ABLE To Do My Own Bookkeeping?
Welcome to the first episode of our four-part series where we are diving into all the questions asked when you are deciding if you should do your own bookkeeping. In this episode, we talk about how you know if you are ABLE to do your own bookkeeping. Learn about what bookkeeping is, if you could save money doing your own bookkeeping, how doing your own bookkeeping puts you in control and if it makes sense financially to do your own bookkeeping. By the end of this episode, you will know if you are ABLE to do your own bookkeeping.
Is Doing Your Own Bookkeeping Right For You?
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How do I know if I am ABLE to do my own bookkeeping?
Today’s episode is the first in a series where we will help you find out if doing your own bookkeeping is right for you. It isn’t right for everyone, but after listening to this series, you will have a good idea if it is a good fit for you. Listen in and find out if you have the ABILITY and if it’s worth considering doing your own bookkeeping…
Welcome Back…First, let’s take a peek at the definition of bookkeeping…
Bookkeeping is the process of tracking all of your business’s financial transactions.
Why does bookkeeping matter?
- You need it to file your taxes
- It lets you know where your money is coming from and going to
- You need financial statements if you are borrowing money or taking out a loan
- (without getting to off topic here, your financial statements are made up of your Balance Sheet & Profit & Loss Report.) we’ll dive deeper on this in the next episode.
- It helps you catch errors by reconciling your accounts and making sure you don’t have any duplicate or missing entries.
You actually may be doing parts of your bookkeeping already…You will normally need to do some of your bookkeeping even if you are outsourcing your bookkeeping. You would still need to gather all your bank statements, credit card statements, deposit information, etc if you outsource your bookkeeping. And there will be many times that your bookkeeper will come back to you for answers on questions they have on your transactions if they are unfamiliar with your business.
You could possibly save money by doing your bookkeeping yourself.
You should ask yourself if you care about your bookkeeping. If you don’t find it interesting, you may put it off and procrastinate and just not do it. If you don’t find your bookkeeping interesting and find yourself putting it off, you won’t have timely information which leads to decisions you make about your business with out this important data.
Doing your own bookkeeping puts you in control. You are the one that records the transactions, you are the one that can generate a financial statement when you need it, you are the one that sees what the balance in the checking account is…
You become more knowledgeable about your business financials…you know exactly what your transactions are for. You don’t have another person deciphering this for you. You also know if there are any personal funds going in or coming out of the business. This insider information is valuable. You don’t want these amounts accidentally recorded as income or expenses.
Does it make sense financially? What is the cost if you outsource your bookkeeping? How much will it cost you to purchase an accounting software if you decide to go this route? Make sure you consider what the value of your time is.
Lastly, make sure you have a tax preparer. You can count on your tax preparer to go over your transactions prior to filing your tax return as a way to double check your work. This will help put you at ease knowing your tax return is filed correctly and you can start the next year on the right foot.
Alright, to recap this episode,
If you are starting to consider doing your own bookkeeping, grab our FREE Guide on the 5 Essential Strategies For Stress-Free Bookkeeping. Go to FinancialAdventure.com/5Essentials to get your copy.
And…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? Do you need to be held accountable? Join our PRIVATE Facebook and post your action item, we’d love to support you.