Also referred to as a top-level bookkeeper, level-one bookkeepers can save you time and money and give you control over your small business budget — way above data entry tasking. Here’s everything you need to know about level-one bookkeepers and why they can help your business this year.
While the figure that 30% of small businesses fail within two years is a scary prospect, there is a common denominator among these shut-downs: financial problems. 82% of business failures are because of poor cash flow understanding and mismanaged money, which means that you need to find an appropriate solution to these pain points.
Hiring a level-one bookkeeper to maintain your small business budget is the best thing that you can do for your startup. Read on to learn what these professionals do and how they can benefit your specific needs.
Standard Bookkeeping vs Accounting: The Basics
Those with limited financial experience often mistake bookkeepers for accountants, but there are some key differences.
The services themselves are different; while accountants plan taxes and use accounting software, bookkeepers provide specific business-level solutions. Bookkeepers are more general in their financial statements while accountants look at finances on a more complex level.
Bookkeepers and accountants also provide different business insight when looking at your finances. Accountants look at broader, higher-level finances and manage big-picture commerce. Bookkeepers are essential for day-to-day economic decisions for your small business including where to allocate money, what resources to invest in, and how to budget for specific projects.
One of the most important distinctions between bookkeepers and accountants is how they manage tax filing. While accountants are certified to actually file business tax returns, bookkeepers are not. Instead, they perform the integral function of processing payroll taxes.
Are Level-One Bookkeepers Different From Standard Bookkeepers?
Level-one bookkeepers are a bit different from the standard bookkeepers discussed above. They can do everything that standard bookkeepers can do, but they also can perform many “accountant-specific” services. This means that they can install and use accounting software, look at finances on a complex level, and offer both small-picture and big-picture financial advice.
Essentially, they can do everything that a CPA can. The only exception to this is filing taxes. Rather than doing this on their own, they closely work with a CPA to review, finalize, and submit your small business’s taxes.
Many companies outsource level-one bookkeeping to serve as fractional CFOs. These professionals have experience with many different companies and the knowledge to help all types of SMBs. These level-one bookkeeping services for small businesses assist you on a part-time basis to ensure that all necessary tasks are completed.
Why Hire a Level-One Bookkeeper for a Small Business?
Hiring a level-one bookkeeper is better than hiring an accountant primarily for budgetary reasons. If you were to hire an in-house accountant or outsource to a CFA, you would need to shell out a lot of cash. Unfortunately, you would not be getting any services that a highly-educated, highly-experienced, and highly-motivated level-one bookkeeper could not provide.
Hiring a level-one bookkeeper gets you the services that you need at the lowest possible price. In fact, the right provider will allow you to purchase a full package to meet all of your bookkeeping and accounting needs. Of course, a la carte services are also available for businesses who need only a few specific services.
Another awesome thing about level-one bookkeepers is that they provide the best of both the bookkeeping and accounting worlds. While they are not CFAs, they function like them on most levels.
However, because they are not CFAs, they also have not lost sight of smaller-scale financial analysis and allocation. Level-one bookkeepers are ideal for keeping up both big-picture ideas and the day-to-day management of small business accounts.
This leads to smoother cashflow management because a single professional can help you manage costs, expenses, invoices, debts, and taxes. You won’t need to rely on multiple people working with different information. Plus, since level-one bookkeepers will provide you with financial advice, they have the ability to be major players in your small business operations.
Easy Access to Funding
As a small business, you will likely need to take out loans at some point. When trying to impress a lender, having a bookkeeper can help you to present a stronger-seeming business plan. This will show lenders and banks that you have thought through where your funding will go and therefore make them more likely to loan you money.
A good level-one bookkeeper can also help you to find grants and loans. They can then help you to negotiate with lending agencies as well as with potential investors.
It can be easy for a small business owner to forget financial reporting deadlines. This can result in fairly hefty fines that at an early stage of business may mean closing your doors. Luckily level-one bookkeepers know these deadlines like the back of their hands due to rigorous training.
Experts can make sure that your reports and other paperwork are in order well ahead of their due dates. The process becomes painless, simple, and stress-free since you no longer need to worry about fines and penalties.
Easier Daily Operations
Last but not least, a level-one bookkeeper can save you time and painstaking financial effort. Many business professionals don’t have the knowledge or resources to do mathematical equations and paperwork all day.
This makes sense- you started a business to reach consumers, put your innovative goods and services into the world, and make a profit. With the help of a professional, you can focus on these reasons that you opened your doors in the first place. You’ll be able to focus on your own interests and be as productive as possible.
When you know someone capable is balancing your books, you will be able to channel all of your efforts into core products and outreach. You can enjoy your operations worrying about the ramifications of financial and cash flow mistakes.
Manage Your Small Business Budget Today
While managing your small business finances can be a challenge, a level-one bookkeeper can save you stress, time, strife, and money. Now that you know all of the ways that this is possible, it’s time to discuss how we can help to review and work with your numbers.
We’re committed to helping you set and stick to a small business budget effectively. That’s why we’re excited to discuss how a highly educated and certified bookkeeper can help you in a myriad of ways.