5: Do I Have The TIME Needed To Do My Own Bookkeeping?
Welcome to the fourth and final 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 take a deep dive to find out if you have the TIME needed to do your own bookkeeping. We’ll find out if you even have an interest in doing your own bookkeeping and if you are you willing to make it a priority. You’ll learn how to figure out approximately how long it will take you to do your own bookkeeping and the best strategies for getting your bookkeeping done on a consistent basis. By the end of this episode, you will know if you actually have the TIME necessary to do your own bookkeeping.
Is Doing Your Own Bookkeeping Right For You?
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Today’s episode is the fourth and final episode in our 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. Probably one of the most important topics in this series is finding out if you have enough TIME to do your own bookkeeping…Listen in and we’ll find out…
Time…we all have the same amount of it, yet everyone spends their time in different ways. If you’re like me, you’ll find yourself wishing you had more time every single day. Today we are taking a look to see if you have enough time to do your own bookkeeping and we have some great strategies to make the most of your time…
First, I want to ask you if you are interested in doing your bookkeeping? If you have no interest maybe time isn’t going to be a factor in your decision. Some business owners get caught up in looking at their numbers and others really just are not interested and base their success on other aspects of their business like how busy they are. You may also find that you are not real interested in the bookkeeping, but once you start doing it and are able to start analyzing some of your numbers this may change. Just imagine being able to look at how this month did in sales compared to last year at this time. Would knowing these numbers affect how you run your business?
If you decide you do have a genuine interest in doing your own bookkeeping, you have another hard decision to make. You know it is going to take some of your valuable time do keep your bookkeeping up to date. I want you to really be serious with yourself and decide if you are willing…and able to take additional time from your day to do your own bookkeeping.
Once you decide you are going to make time to do your own bookkeeping you will then need to ask if you will make your bookkeeping a priority. If you don’t make your bookkeeping a priority, it may be better to outsource your bookkeeping since you won’t have timely information to make smart business decisions. You will ultimately need to have your bookkeeping done to file your tax return, so why not make it a priority and just get it done on a consistent basis. I feel this area is where many business owners struggle. It seems once their bookkeeping falls behind, it becomes less and less of a priority because they know it is going to take a long time to catch up. Don’t let this happen to you.
Do you have your processes and systems in place? Once you have some standard operating procedures set up, you will find that the process starts to flow much smoother and will start to save you time. If you haven’t already, go back and listen to Episode 3 where we talk about processes and what you need to do your own bookkeeping.
Even if you outsource your bookkeeping, you still have bookkeeping tasks that will need to be done. You still need to gather all the documents to give to your bookkeeper. Take note of how long this would take you and consider this time as well when you figure out how much time it will take to do your bookkeeping. The net amount of time may not be as much as you think.
Look at how many transactions you have in a single month. Figure out an average amount of time it will take for you to record all of these transactions on a monthly basis. Remember you will need to reconcile your accounts too, so this will add some additional time. Do you feel like you would have enough time to record these transactions each month?
Can you schedule your bookkeeping time in your calendar? Would you have time to do your bookkeeping every day, week or at the very least once a month? Block this time off and treat it as if it is a regular appointment. Don’t let anything change this time because once you make an exception, you will find it hard to schedule that time back into your calendar. You wouldn’t cancel an important appointment with a customer, so don’t cancel this important time for your bookkeeping.
Make doing your bookkeeping a habit. Be consistent and try to batch your bookkeeping. What is batching you ask? Well, if you took some time and recorded all of your expenses at once, you would probably get pretty fast at entering them. The same thing will happen if you batch all your invoices. Batching your transactions just means that you focus on doing the same thing over and over so that you can do it quickly and then you move on to the next task. This will help you to be more productive and help you concentrate on what you need to do. Think of the time you will save rather than sitting down to record just one transaction. You’d have to get your bookkeeping system open, get the information for that one transaction, record that one transaction and then put it all away again. This would not be a very efficient way to do your bookkeeping.
If you decided to use a computer software like QuickBooks Online, you will find their systems are geared to save you time as well. QuickBooks Online for example has an option for you to download bank feeds into your software. This means that QuickBooks will connect with your bank account and will take each transaction processed and enter it into your QuickBooks data file. All you need to do is make sure the account that the transaction is recorded as is correct and then you simply click a button to add the transaction. Technology like this is saving a lot of time for small business owners and making the process of bookkeeping much more simplified and easier to take over.
You may think doing your own bookkeeping will save you money, and you may be right, but make sure that you are considering what your time is worth when you calculate this out. Figure out how much it would cost to outsource your bookkeeping. Get a few quotes from bookkeepers and accountants. Then calculate how much time it will take you to do your bookkeeping and multiply that by what your time is worth. Compare these figures. You may find that your time is much better spent on sales verses bookkeeping, or you may find that you can save your business money by doing your own bookkeeping. The most important point here is to value your time. Many small business owners don’t think the time they spend in their business is costing them anything, but it really does. Even if you are not collecting a “paycheck” from your business, your time is still valuable and you should be able to put a price on it.
One more thing. If you decide to do your own bookkeeping, you may want to think about hiring an accountant or bookkeeper to help you get everything set up at the beginning, and possibly have them help you with your first month of bookkeeping. This may seem counter intuitive, but if you pay someone to do this, you will probably save LOTS of time that you would spend trying to figure out your computer software or trying to decide which account to code transactions to. After the first month has been entered and reconciled, you have something you can go back to and look at when you have questions. One additional bonus when you do this is that you know your bookkeeping is set up correctly from the start and you don’t have to doubt yourself if you are spending a lot of time on something that may not be producing accurate financial reports. This could also save a lot of time at year end if your tax preparer finds a lot of errors in the set up and needs to fix them prior to filing your tax return. I always say garbage in garbage out, and this is a perfect example.
If you are considering 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.