• When to hire a bookkeeper

    Original Article

    When to hire a bookkeeper, according to experts

    One of the best parts of running a small business is the pride of getting everything off the ground yourself. Not everyone has the vision and drive required to successfully take a concept and bring it to life. And the thought of hiring external staff, like a bookkeeper, can feel a bit daunting.

    “Early on, when you’re just starting out, it’s manageable to track everything yourself or use basic software. But as your business grows, you might find that managing all those invoices, payments, and expenses becomes overwhelming,” explains Steven Kibbel, certified financial planner and founder of Kibbel Financial. “I’ve seen small business owners who wait too long to address this and end up with errors in their books, missing payments to vendors, or even misreporting revenue.”

    SEE ALSO: The 20 best tools for starting your own business

    Sure, you might pride yourself on running a lean business, but a good bookkeeper should be seen as an investment, one that helps you track and retain more of your hard-earned money and frees up your time to focus on what you’re best at.

    If you’ve been wondering whether or not you need outside help to track and manage your small business expenses and income, you’ll want to read on. Here are the tell-tale signs that it might be time to hire a bookkeeper, according to a certified financial planner and a small business tax advisor.


    1. When you’re unable to keep track of the inflow and outflow of cash

    “As your business grows, managing your own books can quickly become overwhelming. You might lose track of who owes you money, miss vendor invoice deadlines, and struggle to accurately track cash flow,” says Alex Cook, VP of Small Business Tax at Block Advisor. “Reliable cash flow management is crucial for making informed business decisions that ensure long-term success. However, if bookkeeping isn't your strength, it can hinder your progress.”

    According to Cook, untangling financial messes on your own can consume valuable time that could be better spent on sales and revenue generation. If this sounds familiar, it might be time to outsource your accounting to a trusted provider.

    2. When bookkeeping starts eating into your time

    Another big trigger is when bookkeeping starts eating into the time you should be spending on running and growing your business. “I worked with a client who owned a small retail shop, and she told me she was staying up until midnight every night trying to reconcile her accounts. That’s time she could have spent sourcing new inventory or marketing her business,” explains Kibbel. “Hiring a bookkeeper freed her up to focus on the creative side of her business, knowing her finances were in good hands.”

    3. When you go international

    Financial complexity is another issue. Think about it like this: If you start hiring employees or expanding into new markets, you’ll start dealing with payroll taxes, inventory tracking, or even multi-state sales tax compliance, which you might not be entirely proficient in. This is where a bookkeeper becomes invaluable because they can handle those details while keeping your records clean and accurate. “One of my clients who runs a small e-commerce business hit this point when she started selling internationally. The tax and currency issues got complicated fast, and she realized it wasn’t something she could keep doing on her own,” says Kibbel.

    4. When tax season becomes a headache

    “Tax season is a huge pain point for a lot of small business owners,” says Kibbel. “If you find yourself scrambling to pull together receipts and records, or worse, missing out on deductions because your books aren’t organized, it’s probably time to hire someone.”

    “I’ve seen business owners save thousands in taxes because a bookkeeper ensures everything is categorized properly and ready for the CPA to review,” adds Kibbel. “And if you’ve ever been hit with a penalty for missing a tax deadline, you know how costly that can be.”


  • Tips for a Hassle-Free Tax Filing Season

    Tips for a Hassle-Free Tax Filing Season

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    If you're stressed about tax season, you aren't alone. The tax filing process is complex and can be daunting for small business owners. While you might be compelled to handle your paperwork and taxes alone, mistakes are likely to be made, and a DIY approach could lead to serious issues down the road. Your best bet is to enlist Lakeside Bookkeeping Services, in addition to taking the following steps to ensure a hassle-free tax filing season. 

    Ensure your business entity is the best one for tax purposes.

    Before tax season arrives, double-check that your business entity is the best option for your tax needs. An LLC, corporation, and sole proprietorship all have different requirements in terms of tax payment and reporting obligations. For example, a sole proprietorship is ideal for a small home-based business, but an LLC may be needed for greater legal protection if your company expands.

    Make note of relevant deadlines in advance.

    You don't want to miss any IRS filing deadlines for your business. Take the time to research what's due when and make a note in your calendar to start the preparation for filing a few weeks prior to the deadline. Not sure what paperwork you have to submit? The IRS has information about business taxes on their website. You can also consult a professional tax preparer for advice.

    Start organizing your paperwork now.

    Start gathering and organizing the paperwork you will need to complete your tax filing well in advance. Even if you hire external help, they will need the raw data to work with. Small businesses may need to provide financial statements, capital-asset activity, evidence of business vehicle use, and a summary of any home office expenses (including receipts). You will also need your federal and state tax identification numbers. 

    Research your tax credit and deduction options.

    Taking the time to do research tax credits, rebates, and deductions could save you money. Depending on the size and type of your business, you may qualify for a health care tax credit, for example. You can also deduct certain property, charitable contributions, and pension plan startup costs, among others. There are also possible credits for small business owners. Again, a professional can advise on what you may be eligible for, saving time and stress.

    Get tax preparation tools to streamline the process.

    Tax filing involves a lot of paperwork, especially if your small business hires employees or independent contractors. Investing in the right technology can streamline paperwork processing. Take 1099 forms, as one example. There have been some important changes recently, so you’ll need to stay on top of them in order to choose between 1099-NEC and 1099-MISC correctly. When you use an online payroll system, you can do your 1099 filing electronically and eliminate the guesswork. Online payroll also makes it easier to pay contractors quickly.

    Expect the unexpected.

    Even with sufficient preparation, odds are that some surprises will arise during tax filing season — good and bad. Your tax preparer may reveal that you're eligible for a certain credit you didn't know about, for example. Alternatively, you may find that you're missing essential paperwork (like 1099 forms) from some of your independent contractors. This is why it's so important to leave plenty of time for your tax preparation. When surprises arise, you want time to fix them.

    Don't let tax season overwhelm you. The above tips can help you get through it easily. If you find yourself struggling, don't hesitate to turn to a professional for help. The investment will be well worth it, as it will save you time, stress, and energy.

    Lakeside Bookkeeping Services is prepared to help you with all of your bookkeeping needs, in addition to assisting with backlogs and annual reviews, we also offer business consultation to help make sure your business is on the right track. Reach out today via phone 603-941-0411 or email: Justin@lakesidebookkeepingservices.com.



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