“I can hire a bookkeeper later” FALSE
Starting a business without good back-of-the-house office support is a recipe for failure. As soon as a business becomes an LLC or Inc paperwork needs to be handled properly. A business plan and budget are a must. If the owner is not an expert on money management, he or she should immediately hire someone who is. It’s good business to have a lawyer, CPA or tax preparer on some sort of retainer. But they can be expensive, so save them for the big issues. For the daily paper an onsite bookkeeper, at least part-time, is a must.
“I don’t need to know accounting to use the software.” FALSE
This is false advertising from a company that wants you to depend on them. An owner who believes this will spend a lot of time and money on the “help line.” If you don’t know what a Chart of Accounts is, or it’s purpose, how can you set one up? Yes, there is a basic list, but you then need to choose what’s right for your type of business. You also need to enter the information into the correct account.
Over the years I have seen a lot of great entrepeneurs, with wonderful, ideas start a business. They purchase accounting software with the idea of saving money by doing the bookkeeping themselves. After they try it for a while and either get too busy or just can’t figure it out, I get a call. My first priority becomes cleaning up the Chart of Accounts and moving data, so reports accurately reflect business. Sometimes, by the time I get the call I must bear the bad news that payroll taxes are owed. Those can add up quickly, leading to my next point:
“Doing payroll myself will save money.” FALSE
Once payroll taxes get past due, it may be hard to catch up and there are penalties. Employers are withholding money from their employee’s pay with the understanding they will pay that money on their employee’s behalf. When that does not happen, they are actually stealing from their workers.
Success comes from teamwork. TRUE
A wise business owner has a good bookkeeper and a tax professional on their team. This owner understands spending a little money up front for the administration of their business will save a lot of stress when tax time rolls around.
“Happy (work) wife, happy life.” TRUE
One more thing: The people handling the paperwork always see what the owners’ priorities are-where they are spending the money. The wise business owner appreciates the money managers and pays adequately, and on time.