Hello again! Summer is almost over and my favourite time of year will soon be upon us! Back to school! Of course I jest, but the months from September to December are definitely my favourite.

I have had some resistance lately to the cost of bookkeeping so I wanted to go over why the cost is what it is, why it’s important and what you can do to reduce your bookkeeping bill.

So, what is the cost of bookkeeping?

First, the cost of bookkeeping ranges from about $20/hr to $90/hr depending on where you live and who is doing your bookkeeping.  Here in London, Ontario, the average seems to be about $40/hr. Let me ask you this: how much do you pay an electrician to come into your home? A plumber? An IT specialist to help you with your business? In all of these cases you are looking at a minimum of $80/hr. And you pay it because you need the work done and need it done right. Why should your bookkeeping be any different? This is your business we are talking about. Don’t you want someone who knows what they’re doing to be properly taking care of one of the most important aspects of your business? I can assure you that when the bookkeeping is done incorrectly it will cost you far more to have it corrected.

How do I know?

I’ve had a few clients who have paid upwards of 5 digits to have their bookkeeping corrected. Can you afford that? As a small business owner, it will put a large strain on your financial situation. Having a qualified (and I stress qualified) bookkeeper spend 2 or 3 hours per month keeping you up to date and compliant is worth more than you can imagine. Both in correcting poor bookkeeping and in keeping you from having to pay penalties for late filing. Need to know how to find a good bookkeeper? See here.

Bookkeeping can make or break your business.

Good, accurate and up to date bookkeeping is crucial for having financial statements you can rely on. How can you run your business without these important documents? How can you make good, relevant decisions that directly impact your business? Quite simply, you can’t. You spend hours growing your business and put your blood, sweat and tears into it, why not make sure it’s properly taken care of? 

What can you do?

• Organize your documents in some order. I like documents that come to me organized by month. Include invoices you have billed out, bills you have paid, receipts for various expenses, bank and credit card statements and any thing else that may have affected your business in a financial manner. Also include any CRA documentation you may have received as this will help your bookkeeper keep you compliant.
• Have everything in to your bookkeeper in a timely manner. If you have your bookkeeping done monthly, make sure all your documents get to your bookkeeper by about the 15th of the following month. This will ensure that the bookkeeping will be done on time for any remittances that are due as well as give you an idea how your business is doing on a month to month basis.
• Keep business and personal expenses separate. If the bookkeeper has to sort through what is personal and what is business, this takes valuable time and will hike up your bill.
• Ensure documents are properly identified. Ensure receipts, bills, invoices, deposits, withdrawals etc. are marked as to what they are for. Again, if your bookkeeper has to search this information, it takes more time.

Your particular bookkeeper will have more ideas specific to you on how to help him/her out in keeping the bill at an affordable rate for you.

Many business owners neglect their bookkeeping for one reason or another. For further evidence on the importance of your bookkeeping, this article is on point. But it’s clear that it is as important to your business as the work you do. And isn’t your business worth it?