Although it’s one of their most important roles, most small business owners dislike the task of keeping books.
There are three parts to bookkeeping: 1) setting up the books; 2) entering data and filing; and 3) analyzing what the data means.
It can be tempting to immediately outsource these duties to a professional bookkeeper so you don’t have to keep up with such a tedious task, but it’s very important for a business owner to understand what is going on first before hiring outside help. The bookkeeping software should be customized to reflect the business owner’s goals and preferences for expense accounting.
Once a professional bookkeeper is hired, the owner should still periodically review the books and conduct quality control to find out what the numbers are saying. Owners intuitively know what is going on in the business, but the books become the validation of what you think. Keep a good set of books to make sure your assumptions accurately reflect the facts.