When you’re running a small business, there’s plenty that you need to keep track of, and the list of potential pitfalls seems to never end. You’ve need to provide your product or services, get the work done on time, and keep the whole operation running smoothly. Missing a step at any point can become a major setback. You may not even be thinking about the impact that poor bookkeeping could be having on your business. There are, however, a number of ways in which your bookkeeper may actually be ruining your business.
As busy as you get as you try to get your company off the ground, it’s easy to forget the importance of bookkeeping. We all know we need to keep financial records, and in the earliest days, most business owners start by managing the books on their own. As the workload gets heavier, it’s common to either have a family member, or someone who’s already on staff take over bookkeeping responsibilities. Eventually, though, you’ll probably want a dedicated person who has the necessary expertise, and who can also devote their attention and focus to your books. Still, there are unseen risks when you trust your books to one individual, and it’s usually a better choice to outsource your accounting.
For starters, it’s rarely a wise idea to rely on one person to have complete oversight of your company’s finances. Whether it’s time to order more materials, expand your office space, or hire more personnel, you’ll need to get an accurate view of your accounts so that you can make an intelligent decision. When you count on only one in-house bookkeeper, and that person works only on your books, they won’t have the perspective that could be gained by having an outsider provide additional review and insight. A virtual accountant, on the other hand, works with numerous clients, is familiar with market and industry trends, and will be able to provide additional guidance based on the bigger picture that they’re able to see.
Perhaps a bigger danger yet is one that none of us want to think about, especially when running a small business, and that is the risk of internal fraud. We like to see our small business as just like family, and no one wants to consider the possibility that we have an “enemy in our own camp”. Yet insider theft or fraud does occur, as we see in the news. If you’ve only got one bookkeeper, there’s no one but you looking over that person’s shoulder, to keep him or her honest, except yourself. And they’re likely to know more than you do about accounting, which is why you hired them in the first place.
In contrast, when you outsource your bookkeeping to a virtual accountant, you eliminate these risks. A virtual accountant won’t have access to your blank checks or account numbers, so there’s no chance of any theft from your accounts. They’re also a team with a system of checks and balances in place. This will serve both to catch any errors, and add additional review and oversight to prevent any misdoings.