It’s that time of year again, and no, I don’t mean spring. I mean tax time, which as business owners, we all just love. (And yes, that’s me being sarcastic.)
Suddenly, things like bookkeeping and accounting are on the list of higher priorities as we review our numbers like profits, expenses, and overall billing in preparation for tax time.
I recently had my four year anniversary in my business, which means, for the fourth year, I’m in the same boat figuring out how to best manage my money. As part of that, I tend to look at my ongoing expenses, including the software I’m using. I start questioning if I need everything I’m using, if I want to upgrade, or if I need to change tools entirely. (My quest for a business tool that’s like a Swiss Army Knife continues!)
[bctt tweet=”My quest for a business tool that’s like a Swiss Army Knife continues!” username=”freshtakepro”]
Could Your Time Be Better Spent?
One tool I’ve been looking at closely is my QuickBooks Online, which I’ve been using for about three years. It’s been a lifesaver as I’m able to keep on top of my bookkeeping, and it automatically delivers my transactions feed directly into it from my bank account. But I’ve noticed that it’s taking me about two hours, every-single-month, minimum to handle this.
I’ve been questioning if that is a good use of those two hours or not, so I did a little math. Looking at my time, that’s a minimum of $200 a month I’m spending on reconciling the books, making sure the transactions are all accounted for and keeping track of the day-to-day transactions.
I don’t particularly love this task, so I realized it may be smart for me to look to hire out that task to someone else. The bottom line is that I don’t really have a lot of time to do it, and I tend to do what most people do: wait till the end of the year and then play catch up. When that time comes, I take about a whole week and have to continually get everything done in time for my accountant to do my taxes. (Who’s with me and does this too?)
The cost of my time is just the start. There’s the cost of QuickBooks Online which I’m paying $35 a month for. When you multiply that by 12 months, we’re up to $420 a year to have this tool. Layer in the $200 a month for me to do the work, and we’re up to $2820 a year for me to do the bookkeeping — which I don’t even like doing anyway!
The Tech Tool Strategy
Based on the above math, on average, my bookkeeping is costing me about $235 per month, which means I could easily hire a bookkeeper to do it for me at the same cost — or even less.
This isn’t exactly new to me, as I’ve been looking at Bench, a bookkeeping service for small businesses. In fact, I’ve had two consult calls with them, but I keep deciding to continue doing it myself.
Enter the Tech Tool Strategy
This is my favorite way to figure out for myself (and for my clients) whether or not a tool that’s being used is optimized and/or if it can work for someone. I can also figure out whether or not the task or the way that something is getting done is the most cost-effective it can be.
When I talked to Bench, I found out that my time for doing my bookkeeping would be drastically reduced. In fact, it would only take me about 10 to 15 minutes maximum per month, as I would only need to upload one report, and since my other accounts will be synced, I would just have to answer any minimal questions the bookkeeper might have to ask me based off of my transactions.
Right now, my cost to do this myself was $235 a month, and they could do it for $115/month with an annual plan. The 10 to 15 minutes a month I’d have to invest is a far cry from the two hours I was spending per month.
This is a clear win for me and my business, as I’m actually saving money and time. And that’s not even getting into the stress I always run into at year end. (So basically, this is priceless to me to get rid of the stress!)
[bctt tweet=”This is a clear win for me and my business and PRICELESS to me to get rid of the stress!” username=”freshtakepro”]
When you do this type of analysis, you can quickly see where you could save time, money and/or stress. And it works for most types of tools or investments, as you’re able to make a fact-based decision on what you need or may not need anymore. (Often, clients find out they are paying way too much for certain things when I run them through this.)
By moving my bookkeeping to Bench, I’m going to recoup the time and energy that goes into handling this part of my business. I can hand it off to a professional and focus on what I do best. Plus, I’m not stuck doing this task every year around this time when I’m at my busiest handling things for my clients.
Based on this, I’m personally going to run all my tools and other investments through this analysis so I can cancel or upgrade, when appropriate. I challenge each of you to take a few minutes when you’re doing your reviews for the year and running your numbers to figure out where you can save time, money, stress, or all of the above.