Attention start-up owners! You need to hire a bookkeeper today or risk losing it all to the whims of the economy.
2024 looks rough for startups, with the long-anticipated recession on the horizon as the unemployment rate crosses the recession threshold. Everyone is holding their breath waiting to see which way the pendulum swings, but none more intensely than startup owners. The plain fact is that startups are typically ill-equipped to deal with economic turbulence. 82% fail due to poor cash flow management, and financial volatility in a recession is a recipe for disaster.
This is where our advice to hire a bookkeeper comes from. The only way to hedge against the coming recession is by getting your house in order. The books need to be cleaned up, and full focus devoted to growth and revenue generation. Before the economic tidal wave can crash, you need to start making and saving money and build your safety raft.
The first and easiest step to start with is to hire a bookkeeper. A bookkeeper is a relatively affordable professional resource, and has a lot to offer for the price tag. In this blog, we will go over the reasons why a bookkeeper is a solid investment against recession, as well as discuss how even startups with the tightest budgets can find a talented bookkeeper.
Table of Contents
What is a Bookkeeper?
For those unaware, a bookkeeper is an accounting professional specializing in maintaining the books of accounts. It is a fundamental skill required to run any business, and having a dedicated professional to address it comes with a slew of benefits.
Before we discuss said benefits, let’s first talk a little about the importance of bookkeeping.
Why Hire a Bookkeeper?
Bookkeeping is an integral part of business. It is the process of recording transactions in the business’ books of accounts. Without bookkeeping, startups would have no idea how much money they were making or spending. Bookkeepers are also usually capable of and responsible for generating the business’ financial statements. They also play a pivotal role during auditing, being the ones responsible for maintaining the records.
Oftentimes, financial work falls under the entrepreneur’s workload in a startup with 49% handling payroll and 34% handling bookkeeping according to QuickBooks. Since it is a delicate responsibility dealing with finances, many are averse to letting someone else handle it. The fact is that at some point, every business needs to hire a bookkeeper. They are just too useful and advantageous not to. Today’s discussion centers around the role of a bookkeeper, and why now is the best time to find one for your startup.
Also Read: Preparing Your Business for Recession in 2023
Why You Need to Hire a Bookkeeper Today
Time and Cost Savings
While a bookkeeper will certainly come at a cost, they offer a chance at saving far more. When you hire a bookkeeper, you are delegating a huge responsibility over to them. Naturally, this frees up your time as a startup owner to do other things. Things like revenue generation activities.
Instead of slogging through the business’ books every day for hours, that time can be spent far more productively. New products can be conceptualized, new clients can be found, and new opportunities can be explored.
You hire a bookkeeper to save you time. That saved time helps you make more money. A small portion of that money goes to the bookkeeper, but the majority of it is saved and reinvested in the startup. This is the only way for startups to effectively grow without running themselves ragged. A startup owner can do all these growth activities and the bookkeeping, but the sheer stress of that workload is enough to cause permanent burnout.
The easiest solution is to hire a bookkeeper and free yourself. Just because you are a startup owner does not mean you have to do everything yourself. As the old saying goes: if you want to go fast, go alone. If you want to go far, go together. Delegation and teamwork are what makes a business successful in 2024.
Better Financial Management
A bookkeeper is not just a resource for handling mundane activity. They are also often qualified accountants with the skills to improve the business’ finances. A good bookkeeper not only handles the mundane work, but also assists with financial management. They can help with financial statement analysis, and do basic KPI monitoring.
The financial statements they generate are also valuable, assisting in decision-making. While the insights and financial services are fairly limited when you hire just a bookkeeper, they are far better than having none at all. Startups need to take advantage of every edge they can get to survive the predicted recession and make it to 2025.
Read here to know more about the importance of outsourced accounting for startups.
Regulatory Compliance
With AI and automation technology prevalent across the business world, regulations and compliance requirements have grown stricter across the board. Everything is a lot more regulated and monitored, and there is little room for error. Startups especially cannot risk compliance issues, as a financial penalty can be catastrophic.
If you hire a bookkeeper, you are paying them to protect you from such problems. They can ensure that the business’ bookkeeping processes are up to the mark, and every penny is accounted for. They are also a blessing during tax season, and can manage filling forms and filing taxes for you. At the very least, they can keep the books clean and maintain a record of all receipts to help you out in audit and tax situations.
Error and Fraud Mitigation
While unfortunate, there is always a chance that there may be underhanded activity happening in a startup. Teams of entrepreneurs can have malicious actors who embezzle funds and lead the startup to failure. When you hire a bookkeeper, you are paying them to remove this element of mistrust from the core team.
The finances are incredibly sensitive and also very easy to deceive due to no monitoring infrastructure. Unless you ask your business partner to show you the books every day, you will never know where the money is really going.
Outside of fraud, there is also the matter of error mitigation. There can be no mistake in the books of accounts, as a mistaken record can mess up the business’ financial plans. In early startup stages, it is also very difficult to trace problems, as many startups manually manage bookkeeping on Excel. The lack of cloud-based accounting and bookkeeping can greatly increase the danger of bookkeeping errors.
How to Hire a Bookkeeper for Your Startup Today with Outsourced Bookkeeping
Outsourced bookkeeping services are a formidable defense against recession. Startups need not spend beyond their means just to onboard a bookkeeper. Outsourced bookkeeping services open the doors to affordable bookkeepers at your fingertips. Outsourced bookkeeping refers to the delegation of bookkeeping responsibilities to a third-party firm. This allows for massive cost savings opportunities without impacting professional quality.
Expertise Accelerated outsourced bookkeeping services are among the best in the market today. By hiring remote accountants for startups through EA, you can shore up your defenses while reaping the rewards of up to 60% payroll savings. EA CEO Haroon Jafree boasts a decade of experience in the US market as a CPA. He has seen many businesses through tough times, and his sage wisdom can help save your startup too.
Conclusion
Invest and hire a bookkeeper today, whether it be in-house or outsourced. Startups are in the most danger right now, and cannot afford to play it risky. Only with transparent books and well-kept records can you progress towards saving and revenue generation. Get in touch with a professional bookkeeper today and set your affairs in order.