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Nov 19, 2010

Getting your new business off the ground in a highly competitive market will require not only knowledge and skill to produce your product or service, but will need a sound financial footing.  Many businesses are passionate about their product or service, but may dismiss the bookkeeping as effortless or trivial. Keeping track of financial data requires skills that may or may not be appropriate for a family member or friend, especially if that person does not share the passion of your business.

 

Before delegating the bookkeeping tasks of your company to a friend or relative, ask the following questions.

1. Does this person have the skills and knowledge to support your business’ bookkeeping needs?
2. Does he/she really understand the inner workings of your business, i.e. the terminology of your field, how you order your products, how you wish to keep track of inventory, and how you will project future expenses?
3. Will you be able to communicate your need for accurate and timely financial statements, payroll and quarterly tax preparation for the IRS?
4. Will that person have time to devote to preparing invoices or sending statements on a regular basis? What if he/she already has another job?
5. Can you mix your business with personal life without causing difficulties within the relationship?
6. Have you discussed compensation for the work?

 

If your answers are positive, then working with a friend or family member may be appropriate for your company. If you or that person needs some extra help getting started, Wyoming Entrepreneur offers free assistance.

 

However, another option may actually be more beneficial in the long run. Many businesses make the decision to hire an outside bookkeeping firm. The cost is less expensive that hiring an employee since you are only paying for the actual hours that are being spent working on your books. Often, bookkeeping services are flexible and will do part or all of the bookkeeping process, allowing a business owner to do some of the tasks, leaving the more time consuming or difficult processes to the experts…and leaving family relationships and/or friendships intact.

 

Communication and trust are keys to working with any bookkeeper, whether it is in-house or an outside firm.  Interview several bookkeepers to find a good fit and make sure you understand the fee structure and expectations. It is important to review reports on a regular, monthly basis. Also, make sure that taxes and bills are paid on time. When you have an active part in such a review of financial reports, your business will continue to have current information…critical for making smart decisions.

 

Knowing that your financial interests are being taken care with quality bookkeeping will ease the way for you to focus on your strengths, to build the business.

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