When first starting and operating a business, it’s natural to try to do EVERYTHING – from sales and marketing to production, supply management, and administration. But, before long, it becomes pretty apparent that some responsibilities, skills, and tasks aren’t being handled as well as they need to be.
At this point, the business owner is faced with a serious realization – “I’m not very good at some things and the things I am good at are suffering because of it.”
This “epiphany” happens fast – taking action doesn’t. That’s because it means giving up control; entrusting someone else to manage an aspect (or aspects) of your business that you still feel you should do – and can do better – yourself (if you had the time, energy, and ability).
So, when and how do you know which tasks should be “hired out”, i.e., contracted to a credentialed professional?
Since you’re truly the expert when it comes to your business, your markets, your service(s), your product(s), and your industry, trust your instincts regarding which specializations you know you need to retain and which ones would be better to delegate.
To save yourself some time, keep in mind that the one task that’s often retained in-house too long, is bookkeeping. Ironically, it’s one of the most important and impactful business management activities to hand over to a professional – and the sooner the better.
Still not convinced? Then, ask yourself these 4 questions.
And answer them candidly. If you take a thoughtful approach to this exercise, you’ll know – one way or the other – if contracting bookkeeping services is a wise priority OR if it’s OK if you postpone it a bit longer and continue to do your own books.
What training do you have?
Most bookkeeping software providers advertise their product as perfect for entrepreneurs doing their own books. While the software today is more accessible and less intimidating to the neophyte accountant, the commercial versions available are not as friendly to the user as they claim to be – and they are laden with many opportunities to make unrecognized errors.
Without an understanding of what accounting principles are being applied behind the data entry and application processes, it’s commonplace to unwittingly make mistakes that compound quickly as they’re undetected month after month.
For example, I once worked with a small business owner who couldn’t figure out why their revenue in QBO was so much higher than the revenue they could account for. Through a little digging, I discovered that they had been mis-classifying bank transfers as income. Every time they moved money from one account to another, they were increasing their revenue when there wasn’t any new revenue coming in.
This is just one possible problem that can occur when the user doesn’t have a clear understanding of how changes to one account can affect the others.
How much time do you have?
If you find yourself staring off into space just wishing you had more to do each day, then bookkeeping may be a good way for you to spend that time.
If that doesn’t sound like you, or if you don’t even remember what it's like to have free time, then you’re probably better off letting someone else handle your books.
Bookkeeping can be a time-consuming, labor-intensive task, especially if you’re not an organized person. You could spend hours tracking down a payment or trying to figure out what a charge on your credit card was for.
Your financial records are an incredibly important part of running your business, but you can’t squeeze water from stone. If you just don’t have any time to devote to keeping good records, then you’re probably better off outsourcing it to someone who not only has the time to spend on your books, but also has the skill, dedication, and motivation.
Do you like it?
Let’s be honest here. For those who haven’t dedicated their lives to it, bookkeeping isn’t a barrel of laughs. It requires a natural acumen for detail and tends to be best suited for those who see organization as an art form. Is that you?
If you’re like most entrepreneurs, bookkeeping is a dreaded task. When you don’t like a task, you’re far more likely to avoid it until the last possible minute, then try to get it done as fast as you can. In other words, dread often leads to procrastination or rushing. Both of which can prompt disastrous outcomes for you and your business.
It’s ok – and quite normal – if you dislike (or despise) bookkeeping. I’ve been told I must be nuts for loving it. And sometimes I agree.
But, what’s not nutty is the fact that good books can provide huge benefits for your business. Your books deserve, and will benefit from, the attention they’ll get from someone who actually wants to focus on them.
Am I the best person to do this?
You’re the boss, so there are certain tasks inherent in your business that make perfect sense for you to do – and others that make no sense for you to hang onto. The jobs that don’t require your expertise or don’t directly make you money are often better if delegated to others.
As the owner/CEO/boss of your company, you should be the highest paid person in your business. But you can’t verify that unless you have first placed a $ value on your time. If you do this, your decision regarding what tasks to retain and which to delegate can be clearly calculated.
Here’s what you do: Determine your hourly rate and then do a cost-benefit analysis – task by task. Identify which (of your less suitable, less enjoyable) tasks cost more for you to do based upon what you would pay a professional to do it for you while you’re involved in revenue generating activities.
Bottom Line
You likely started your business because you had an innate “knack” for something, more so than just about everybody else. And, if you’re still in business, that means you’re right about yourself and your courage and confidence in your abilities are well founded.
This also means that as your business grows (or has grown) you’ve probably assumed tasks that weren’t innate; some you discovered you enjoy and are good at . . . and others . . . not so much.
The fact is that your time is incredibly limited and lends you much greater returns when you invest it in your core genius. Even if you’re a social media guru, at some point it makes more sense to allow someone else to market your company so you can focus on making money by performing the services your customers are paying you for.
At Still Waters Bookkeeping, my expertise lies with helping others to organize and analyze their financial data. The 4 questions presented in this article are designed to get you thinking about where your time is best spent.
In most circumstances, investing your time, energy, and focus in your core competencies – the strong suits you possess that generate revenue, grow your business, and increase your profits – is where and how should apply yourself in your business.
And, I’m willing to bet, bookkeeping isn’t one of them. That’s why I’m here and why I’m reaching out to you.