I know…..you don’t want to care. “It’s just so much work, and so time consuming, and what is it really going to do for me anyways? I get my wife/husband/uncle/son/niece (fill in any untrained relative in this space) because my time is better spent on selling my products and servicing my clients. “ “Why should I pay someone to do my bookkeeping, it’s so easy, anyone can do it”
I hear those statements all of the time. Not just once in a while, but ALL of the time. Over and over again, that sometimes I get tired of hearing myself saying the same thing.
So in a quick list, here are 5 Reasons why you should care:
- The Stats Don’t Lie. 25% of the 1,000,000 businesses that are started in North America fail within the first year. 80% have closed their doors within the first five years. Stats Canada reports that only 2% of all businesses started, last 10 years. One of the biggest contributors to the success or failure of a business is Cashflow and Tracking Your Dollars. That – is bookkeeping.
- Measure to Manage. In order for a business owner to manage their business effectively, there must be processes in place which measure how the business is performing. If you have no idea of what it is costing you to run your business, how will you know if you are making money?
- It can bankrupt you. The penalties from CRA are getting crazier by the day. I’ve seen clients who neglected filing their payroll deductions for several years. When CRA finally came knocking they owed $15,000 In past deductions. Okay, horrible, but manageable. The penalties from not filing and paying these remittances – $29,000. Not a typo.
- Your head is not always accurate. Most business owners can very quickly tell you how much they’ve done in sales – with or without any kind of bookkeeping system. But how many can tell you what Profit that actually resulted in after all of your expenses? Very few. And when they do give you a number they tend to forget about all of those small expenses that can add up in a year and eat away at your bottom line.
- Forewarned is Fore-Armed. Timely bookkeeping, can tell you about issues that may be coming up in the coming months. You have high receivables that aren’t coming in for 60 days, but your suppliers are owed money in 45? Cashflow crunch is coming. Rather than reacting once the crunch has arrived, you can get ahead of it. Prepare for it, and be proactive.
Hopefully one of the reasons above will resonate with you and get you motivated to care about your bookkeeping. If you want to make sure that you are hiring the right bookkeeper to do the job, we’ve written a 2 part blog on Considerations Before Hiring a Bookkeeper –