Leverage your time by using a qualified bookkeeper

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Delegation is important to every entrepreneur so they can work smarter, not harder. Now, more than ever this is important.

Many of us understand that delegation to others frees up time for us to make contacts, give and receive referrals, tour properties and ultimately make sales.

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It feels more comfortable to delegate to others those activities that cost money, are considered direct costs or contribute to a sale. The funds spent on advertising a property, a stager or a photographer will ultimately contribute to a sale. An excellent photographer or stager may contribute to a faster sale for more money.

But what about delegating, and paying for, tasks that may only indirectly contribute to profitability? Yes, I am talking about bookkeeping.

Save time and effort with bookkeeping support

Before you stop reading, hear me out. First, how much time do you take each month doing your bookkeeping? If you have everything well organized, maybe four hours a month. You still need to send it to the CPA to correct your mistakes at a much higher hourly rate than a bookkeeper would charge.

Also, you may not have access to accurate financial statements each month. You may not be tracking actual expenses in contrast to budgeted expenses each month. Lastly, at the year’s end, if you rely on your CPA to prepare the year-end payroll tax reports and 1099s, take it from a recovering CPA — you are overpaying for these services.

I interviewed Alicia Hammersmith, director of client services from BooksTime, an online bookkeeping company, who said, “Our bookkeepers are trained in your industry. This makes them more efficient, less likely to make mistakes and allows you to work on your business, instead of in your business.”

We also interviewed Alison Williams, manager of growth partnerships at Bench, an online bookkeeping and tax preparation company, who puts it this way: “Our clients work with a tax advisor and a bookkeeper. This setup creates internal efficiency because as the year progresses, they will have conversations when it appears that tax deductions can be more tax efficient. This frees up the owner from micromanaging the books so they have more time to make sales. This also stops the time crunch as tax deadlines approach.”

Williams also said, “Just bringing it back to the emotion/consequences of leaving it until the very end, it’s like getting pre-approved for a mortgage — what’s better, doing all that paperwork in one go or having yourself organized all year-round!?“

How year-round bookkeeping keeps you on track at tax time

In our opinion, getting quality bookkeeping prepared during the year helps with year-end planning. This creates time to develop good business and tax planning. Waiting until the crunch is not a good idea, as your needs can fall through the cracks.

If your bookkeeper charges $3,000 a year to prepare a balanced set of books and records, that saves you enough time to sell just one more property; you will make, potentially, that additional $3,000. Also, your CPA may be able to reduce their fees by a few hundred dollars as well.

So, what is the most effective way to engage a bookkeeper? I’ve provided a checklist below:

1. Collect all legal documents such as your Secretary of State registration so your bookkeeper has your legal name, and federal and state taxpayer identification numbers.
2. Provide your bookkeeper with your business plan and budget so they can set up a chart of accounts.
3. Your bookkeeper will set up your chart of accounts to input into accounting software.
4. Provide your bookkeeper with a list of your business checking and savings accounts. Also, information about all vendors and customers, independent contractors and employees, if any. (This may already be embedded in your QuickBooks.)
5. This should allow the bookkeeper to prepare a monthly set of reports for you to review showing the results of each month’s operations compared to your budget. You really want to review this with your bookkeeper at least four times a year to catch incorrect postings, and most importantly, for you to really understand your profit and loss.

In closing, keep open to the idea of hiring a bookkeeper to handle your books for you. This time next year, you may be thanking us.