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I’ve met my fair share of business owners who find doing their business bookkeeping is scary. They are afraid of doing something wrong and being audited and having to pay fines and fees.
As an accountant and auditor, I know how scary the word audit really sounds. My clients that I am auditing tell me the first time I meet them that they are scared they are doing something wrong.
But to tell you the truth, an audit is really a learning lesson. Auditors are trying to help you do the right thing in your business and help you out. I don’t tell you this to scare you even more, but to share with you that auditors are looking for proof that you are doing things correctly and will give you help to make sure you are doing things right in the future.
When you own your own business, there are so many different things that you need to keep track of and different people you need on your team. But 2-3 people you really need to have on your team are an accountant, a lawyer and a bookkeeper. Yes there is a difference between an accountant and a bookkeeper, which we will discuss next week.
These 2-3 different people on your team are there to answer your questions when you need them. They are there to help you make sure you are doing things legally. And most importantly, they are there to give you a peace of mind that what you are doing is correct.
It’s not easy by any means being a business owner and sharing your passion with the world. But when you have the right people on your team to help you and answer questions you don’t know the answers to, it makes your business much more passionate for you.
Bookkeeping is simply putting your expenses into the categories that they belong in (i.e. office expenses, rent, advertising, marketing, professional fees, etc.) and keeping track of your income. It can be done daily, weekly or monthly. But a lot of people I know do this at the end of the year, just so they can file their taxes.
So what can you do right now to start doing your business bookkeeping?
Or hire a bookkeeper and let someone else do this for you and just send you a report each month. But when you hire a bookkeeper, make sure she knows the regulations. There are a LOT of accounting regulations out there and it’s not okay for someone to just walk in off the street and start doing bookkeeping because she wants to make a little extra money. Do your research when it comes to hiring anyone on your team.
But also make sure you have an accountant. Not all accountants are CPAs (which is the official certification for an accountant), but they don’t have to be either. They all should have taken the same education to become an accountant.
I may be an accountant and auditor, but I only do bookkeeping for my clients. I can still answer your questions, but I don’t like doing taxes for other people, so I don’t do it. I know how, I just don’t like it. That’s why I’m an auditor. I’ve said that all along throughout my education and all of the jobs I’ve worked. I don’t like taxes, I like being analytical and doing auditing and bookkeeping work. But that’s just my personal preference.
Bookkeeping is a part of being a business owner, so whether you do it for yourself or you hire someone to do it for you, it’s your choice. But it needs to be done. And it will be much easier for you, if you do your bookkeeping at least monthly, if not weekly, instead of once a year.
BUT please make sure to keep copies of ALL of your receipts for your expenses. You must keep copies for at least 7 years. Yes they can be electronic, but you must have all copies to verify your receipts.
Do you still feel scared about doing your own bookkeeping?