On the one hand, it’s almost a prerequisite for entrepreneurs of all types to have that “can-do spirit.” That sense that nobody else sees things quite like they do so, whatever it is they want to accomplish, it becomes something they know they’ll have to do themselves. In a lot of ways, this is an asset as it’s a big part of what has contributed to your success thus far.
On the other hand, this type of mentality can certainly get people into trouble when it comes to the day-to-day necessities of actually running a business – with bookkeeping, accounting, and other financial matters being chief among them. While there may be a time when you can handle your books yourself, that time will likely pass. There are a few key warning signs in particular that you should watch out for to help clue you in as to when that becomes the case.
Maybe the most immediate sign that you should stop doing your own books involves situations where you feel like you’re constantly dealing with last-minute tasks and missed deadlines.
Filing your taxes late because you were too overwhelmed during a year is one thing. Having this crop up multiple years in a row is another matter altogether. Likewise, if you don’t consistently reconcile your books at the end of every month, you could wind up in a situation where you think you have access to more money than you really do, or you’re experiencing cash flow issues without realizing it.
Not keeping up with these tasks because you “didn’t have enough time to do so” isn’t an excuse. If anything, it’s a major indicator that it’s time to bring in someone else to make sure the job gets done properly.
Speaking of not having enough time, this is also another warning sign that you should stop doing your own books – albeit from a slightly different perspective.
If you’re still trying to handle all of your own bookkeeping, it’s safe to say that it’s probably taking you far longer to complete straightforward tasks than it would an expert. Every minute that you’re focused on this is a minute that you’re not making money for your organization. Simply freeing yourself from the burden will allow you to turn your attention towards more essential matters, while also giving you the peace of mind that only comes with knowing that the financial elements are being handled by someone with the right expertise.
Another major asset that most entrepreneurs share is confidence. When it comes to their competitors, for example, they know that while there may be a lot of other companies who do what they do, nobody else does it quite like how they do.
That segues directly into another one of the warning signs that you should stop doing your own books: you completely lack confidence that anything is accurate in terms of your financials.
You’re not 100% sure that all of your invoices are being paid. You have no idea how much money is coming in versus how much is going out. You’re not sure if you’re staying on top of deadlines or if you’re woefully behind. You know that there are no immediate issues to deal with – but you’re not sure if that’s through luck or by design.
If you don’t have an accurate understanding of your business’s financial situation, you can’t begin to make decisions with confidence. That will quickly lead to you making the wrong decisions, which can only serve to put further financial stress on your organization if you’re not careful.
For many, this will begin by having the confidence that only comes with knowing that their books are accurate and that they have been properly closed at the end of each month.
In the end, think about the situation like this. A big part of what got you to the successful position you’re in today was your ability to surround yourself with professionals. Those who brought a particular skill set that you may have lacked and who were able to fill some void that you possessed. Why, then, should the financial side of your organization be any different? If you’ve already noticed any or even all the warning signs outlined above, it’s absolutely in your best interest to enlist the help of a professional moving forward – especially in a situation where the consequences of not doing so could be equal parts disastrous and long-lasting.
If you’d like to find out more information about the warning signs to be aware of to indicate that you should stop managing your own books or to get answers to any other questions that you may have, please don’t delay – contact us today.