January 2024 Managing the Money with Megan Schmitke

managing the money the inventory genius newsletter Jan 04, 2024
Image for January 2024 Managing the Money newsletter article with Megan Schmitke.

Investing in Your Bookkeeping is a Non-Negotiable

by Megan Schmitke

I am all about being resourceful and saving money, and I’m a firm believer that sometimes “done” is better than “perfect.” However, I truly believe that one exception to that rule is when it comes to your bookkeeping and taxes.

Bookkeeping is a LEARNED skill. It is not something that comes naturally. And unless you’ve taken accounting classes it can be extremely easy to mess something up.

But unfortunately, I’ve seen it time and time again - business owners stumble their way through their Quickbooks account because they know their bookkeeping needs to be done, and they don’t think they can afford to hire it out.

Today, I want to give you 4 reasons why investing in bookkeeping is a non-negotiable for you and your business.

Always be “Tax Ready”

Probably the number one reason that people do bookkeeping is because they have to. Plain and simple. Now, obviously I know there are better reasons than that, but that’s a conversation for another time.

If you’re someone that waits until the end of the year to catch up on all your bookkeeping, then I want to encourage you to commit to a better (and much less stressful) way in 2024.

By working with a bookkeeper, you can have up-to-date financial reports each and every month. There’s no year end scramble to piece together some semblance of a Profit and Loss (P&L) statement for your tax preparer. It’s all done for you with very little involvement on your part.

Have Confidence in Your Numbers

Do you know if you’re truly profitable? Do you know what you can afford to pay yourself? Do you know how much you should be saving for taxes?

One of the greatest benefits of having up to date financials and working with a bookkeeper is knowing exactly how your business is performing. You can see how every dollar is flowing through your business, and you can have a second set of eyes to help you see things or think of things you may have overlooked.

With a solid understanding of your business finances, you can feel confident in making business decisions that will help move your business forward.

Saves you money

Like I said earlier, I’m all about being resourceful and saving money.

The problem with stumbling your way through your Quickbooks is it can create a mess. And often times, it’s an expensive mess.

Inaccurate bookkeeping leads to inaccurate reports. Inaccurate reports lead to inaccurate taxes.

That could mean you’re missing out on potential deductions to help you save money on your taxes, OR it means under-reporting your income, and the IRS will come after you with fines and penalties.

Let me give you a couple real-life examples that I’ve helped uncover recently:

By reconciling her payment processor accounts, Ashley found nearly $40,000 sitting in her Sezzle account that had been accumulating there over 4 years.

Andrea discovered that her Shopify & Paypal integrations (and how she was using them) were over-reporting her income in Quickbooks by over $14,000 so far that year, which would have resulted in roughly $4,000 extra in taxes.

Now, I obviously am not saying that working with a bookkeeper is going to guarantee you find these amounts of money sitting around. But, what I WILL say is having someone who knows what they’re doing manage your bookkeeping is the best way to guarantee that you’re not going to overpay in taxes, and that you’re not bleeding money somewhere.

Frees up your time

Let’s face it - numbers and taxes can be boring. At least that’s what some people tell me šŸ™‚

I’m sure you could think of something you’d rather be doing than sitting at your computer working on your bookkeeping. I know the amount of time it takes to do your bookkeeping varies greatly based on your business size, but just bear with me for a moment.

Let’s say it takes you 2 hours a month to do your bookkeeping. Instead of doing that, what if you hosted a Facebook Live sale - how much extra revenue could you earn? Or maybe you host a special event in your brick and mortar to drive extra traffic into your store - how much extra could you earn?

Or maybe you are so overworked that you’d rather take that extra 2 hours and just unplug at home with your families. By investing in your bookkeeping, you can use that time however you’d like.

If you are tired of feeling anxious and confused over your numbers, then commit to making a change in 2024! If you can afford it, invest in hiring it out. If you’re truly not quite there yet, then invest in some training for yourself so you can feel confident in your own bookkeeping abilities.


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