The Bookkeeping Time Dilemma of Small Business Owners

I won’t sugarcoat it: Bookkeeping is to entrepreneurship what a colonoscopy is to turning 50 – you know it’s necessary, it’s uncomfortable, and you really wish there was another way around it. But just as a colonoscopy could potentially save your life, bookkeeping – as monotonous as it may be – could potentially save your business.

A significant number of small business owners are spending upwards of 10 hours per week on bookkeeping. That’s 520 hours per year.

Imagine what you could do with an extra 520 hours. That’s equivalent to 65 eight-hour working days or over three months of five-day weeks! You could invent a new product, penetrate a new market, travel to another corner of the world – I mean, the possibilities are endless. But instead, you’re probably spending this amount of hours on each task:

> Accounts Payable and Receivable (3 hours): This refers to the money flowing in and out. You need to keep track of what you owe suppliers, what customers owe you, and make sure payments are made or received in a timely manner.

> Bank Reconciliation (2 hours): This is the act of matching your bookkeeping with what’s actually in your business bank account. It’s like playing a never-ending game of “spot the difference”, except it’s not nearly as fun.

> Payroll (1 hour): If you have employees, this is a necessary evil.

> Financial Statements and Reporting (2 hours): This is where you compile all your financial transactions into meaningful information, like profit and loss statements, balance sheets, and cash flow statements.

> Tax Preparation (1 hour): Even though it’s not tax season every week, you’re likely spending a bit of time each week getting things ready.

> Miscellaneous (1 hour): Let’s be real, stuff happens. A forgotten invoice here, an unrecorded expense there. This is the time spent on the inevitable clean-up that occurs when running a business.

You know what’s hilarious? No small business owner ever signed up for this. You’d think, “I’m going to start my own coffee shop, it’ll be fun. I’ll chat with the regulars, create funky new latte art, all while wafting in the delicious aroma of freshly ground beans”. You never expected you’d be up till 2 AM reconciling invoices and trying to remember if you can write off that batch of spoiled almond milk.

And here’s the kicker: If you don’t do it right, it’s not just a matter of having messy books. The tax authorities could come knocking, fines could pile up, or you could miss out on valuable deductions.

There’s an array of options available to help alleviate this bookkeeping time dilemma: from software solutions, outsourcing, to hiring a part-time bookkeeper. It’s about understanding what you, as a business owner, value. Is it time? Is it money? Or is it just the peace of mind knowing that you aren’t inadvertently playing Russian roulette with the tax man?