If You’re Wondering Do I Need A Bookkeeper If I Have Quickbooks – Please Read!
You may be asking yourself- do I need a bookkeeper if I have quickbooks. This post will go into everything and answer your question of whether or not you need a bookkeeper if you have bookkeeping software (like Quickbooks) that you manage on your own.
Why Every Startup Should Have a Bookkeeper(Even if You Have Quickbooks)
This post will explain to you why you need a bookkeeper and accounting team for your startup even if you have quickbooks. Read on below why you should invest in bookkeeping services for your new business!
What is Quickbooks?
Developed by the popular financial software company Inuit, Quickbooks is an accounting software package designed for small businesses in mind. This software can help business owners who have no experience in accounting or bookkeeping, and who need professional assistance in categorizing expenses, payroll functions, paying bills, and managing payments. Quickbooks is a highly automated software built for an introduction into the world of financial management for business owners.
An entry level step into accounting and bookkeeping, Quickbooks can be a useful tool for business owners but is no good on its own. Quickbooks works best when paired with a bookkeeper who can help guide and explain things to you. Below are several disadvantages of using solely Quickbooks as your only source of financial tracking within your business.
PRO TIP: You may want to check out this article: how to find the best CFO consulting firm in Los Angeles. It will be very informative!
Disadvantages of Quickbooks
Quickbooks is an entry level solution for small to medium sized business owners who have little to no idea what they are doing. However, if you are looking for a personalized option to scale your business even further, using only Quickbooks is probably not the best plan for you. There are advantages to Quickbooks: it’s an affordable option and easy to use. If you are looking for the best financial decision for your business, however, you will need a bookkeeper too. When used alone as a primary way to organize and track your financial data, Quickbooks has some disadvantages. These may include:
- Limited business features which do include functions such as HR management, lot tracking, barcode scanning, and eCommerce.
- Pricey options for add-ons which can dramatically increase the cost of Quickbooks by up to six times the amount of the basic plan. Some of these expensive add ons include features like automated data backups, multiple users, management charts, customized reporting, and automated approvals.
- Random site crashes and sometimes sluggish site due to a limited number of users and file sizes that are admitted on the site. This can be a huge problem for you and your business, especially if you are working on a large and important transaction.
- No backup or cloud to recover from mistakes which is a necessity these days in the world of technology. Did you accidentally enter data in the incorrect account? Imported multiple transactions to the wrong place? If using Quickbooks, mistakes big and small are permanent and not retractable.
- Customer service which guides users to online forums to help answer concerns or questions instead of customer service specialists. Quickbooks prefers users to find answers from other users instead of assisting directly.
- Easily manipulated data which, while made easier for you to fix errors and mistakes, makes it even simpler for someone with malicious intention to ruin your precious data.
The above disadvantages can be solved with the help of a professionally trained bookkeeper who can keep track of all your financial expenses and can even help manage your Quickbooks account. Using both a bookkeeper and the Quickbooks software can put you at an advantage over other business owners who lose money through poor financial tracking.
What is Bookkeeping?
If you have a business and are looking to increase revenue or simply maintain it, a bookkeeper or bookkeeping service near you is a highly recommended option to keep track of cash flow and expenses. Companies such as Startup Tandem offer a range of financial and accounting services, in addition to Fractional CFOs to help with day to day analysis, reporting and organization. Learn more about our fractional CFOs in Los Angeles or give us a call.
Bookkeeping keeps a record of all financial transactions within your business. Additionally, proper bookkeeping is required to be able to correctly file your taxes each year. Filing your taxes as a business owner is not a matter to take lightly.
Bookkeeping is not to be confused with accounting, which uses the information bookkeepers give to determine a business owner’s financial state and can help with tax returns, independent audits, and certified financial statements.
In comparison, bookkeepers manage your financial data and record financial information. This information is crucial as it is a big part of being aware of your transactions, cash flow, and additional financial matters which are a major part of your business.
Pro Tip: Read our article to learn how to choose a small business accountant!
Why Do I Need a Bookkeeper if I Have Quickbooks?
The answer is simple, and it depends on if you are willing to take the risk of losing money for your business every year. While Quickbooks can be a beginner-friendly way to dip your toes into the world of accounting for your business, it is not the wisest financial decision when used alone and without guidance.
Quickbooks relies on its users to never make mistakes, and this is where a hired bookkeeper can come in handy. Most business owners are not built in bookkeepers and are not aware of the many rules surrounding every entry made. There is rarely a straightforward answer when working as a bookkeeper. That is why it is so much more efficient to work with someone who is trained and can help you jump through all the hoops. Reasons you should hire a bookkeeper even if you have Quickbooks:
- Bookkeepers Increase Financial Accuracy in Your Business
- Quickbooks Does Not Catch Errors That Bookkeepers Can
- Bookkeepers Save Wasted Time That Could Be Used For Your Business
- There Is Lower Risk Involved in Hiring a Bookkeeper vs. Relying on Quickbooks or Employees
- Financial Reports Are More Easily Understood and Presented
- Filing Taxes is Easier
Bookkeepers Increase Financial Accuracy In Your Business
While technology is an amazing tool that is helpful for businesses in many ways, it is not always the most accurate. This is especially true for working with your financial transactions and recordkeeping online. Quickbooks doesn’t see your business from the inside out; it is online aware of what you are inputting. Working with a bookkeeper gives you an advantage of ensuring your entries are correct and accurate. Without accurate tracking, you could be seriously risking expensive fines and penalties with your tax return.
The last thing you want to be doing is struggling during tax season. Not only does having a bookkeeper help you become more organized as a business, but it also helps you have less stress surrounding your finances, too!
Quickbooks Does Not Catch Errors That Bookkeepers Can
Quickbook does not have the ability to detect any errors or mistakes you may have accidentally made. This is where your bookkeeper can really make a difference in your business. Imagine listing an entry incorrectly and having to deal with the consequences down the road. No one wants to find out they owe more than they do be fined ridiculous amounts of money.
Use Quickbooks and also have a bookkeeper on hand to look through your accounts and entries. Your bookkeeper can monitor your accounts and ensure that all entries and transactions are accurately made.
Bookkeepers Save Wasted Time That Could Be Used For Your Business
You own a business and strive to make it a success. Why spend hours record keeping and financial planning when you could be spending your time and energy on your business? Time is more valuable than money and you could be using the time focused on bookkeeping to grow and scale your business instead.
Spend more time doing what you enjoy, and less time stressing about the record keeping portion of your business.
There is Lower Risk Involved in Hiring a Bookkeeper vs. Relying on Quickbooks or Employees
Have you thought about using one of your employees to manage bookkeeping? Not a good idea, as it is much more likely for a signed on employee to commit fraudulent activity than a bookkeeper within a company. Hiring someone from the outside who has been screened by their company is a much lower risk than hiring from within.
If in the unfortunate event that a bookkeeper does commit fraud, there is a company behind them that is able to retain the losses and compensate you accordingly.
Financial Reports Are More Easily Understood and Presented
While Quickbooks has a great feature which organizes and presents your data, most business owners don’t know what to do with the data that is shown. What does it mean for their company? How should they use this information? An understanding of all of the data and how it is shown in the presentation is necessary for reading the report accurately and successfully. Bookkeepers are much more helpful in this regard as they can read the report with accuracy and present it in a way that not only makes sense to you, but to potential investors and shareholders as well.
Filing Taxes is Easier
As stated earlier, taxes are an integral part of your business and are a major aspect of your business. If filed incorrectly, there are costly penalties and fines that can set your business back.
Quickbooks works alongside TurboTax to file your taxes, which can make it easier to file your taxes as a business owner. However, if you want peace of mind, hire a bookkeeper to keep all of your finances in line. The more complicated your tax information is, the higher chance of errors during tax season. A financial expert such as a bookkeeper keeps things running smoothly for you. An automated software like Quickbooks can never compare to someone professionally trained with the books.
Quickbooks vs. a Bookkeeper
Quickbooks can do the basics for your business but at times when used alone is not user friendly. With Quickbooks you can:
- Store and analyze data
- Pay invoices
- Generate reports
- Prepare taxes
- Keep track of recordkeeping
- Use double entry accounting feature
This is all great information to have, but with Quickbooks, it is just that; information. There is no one to guide you through the process or explain to you what your reports mean or how you should enter your business expenses. With the help of a bookkeeper you can have access to all of the information above, but with the added assistance of having someone give you financial advice and explain what is going on with your finances.
Bookkeepers are capable of everything that Quickbooks does and more. Not only can they accomplish all that is listed above, there is the personalized component that Quickbooks does not have available for business owners. Your personal bookkeeper knows the ins and outs of your business, what goals you have, all of your expenses, personal and professional. They are aware of all financial transactions occurring and the cash flow within your business. With Quickbooks, the software relies on you to do a decent job of acting as bookkeeping without the training.
At first, Quickbooks alone might seem attractive to the small business owner with its affordable prices. However, sooner rather than later the features that Quickbooks has as add-ons will add to your expenses and dramatically increase what you pay monthly. Why only choose an automated software such as Quickbooks when you could also use the help of a professional with years of experience?
PRO TIP: Read our article to learn how much does a CPA cost!
Why You Need a Bookkeeper Even if You Have Quickbooks!
It may be tempting as a small business owner to DIY it all and avoid paying for a bookkeeper. However, only using Quickbooks can actually put you and your business at more of a financial strain. With expensive add-on features that can multiply the cost of their software up to six times as much, using only Quickbooks would do more harm than good for your business. Instead, limit your use of Quickbooks and use a bookkeeper to keep track of everything going on within the walls of your growing business.
Technology is evolving which can be fantastic for new business owners. However, why only choose software over a trained bookkeeper when it comes to the biggest part of your business: finances! Allow a trained professional to take over your transactions to let you focus on your business instead. It is my hope this post convinced you on why you need a bookkeeper even if you have Quickbooks!