Hey BP family! Looking for some advice on growing our business and using who, not how. Our portfolio has scaled up to 3 properties we will add 1-2 annually, both individually and through partnerships. I also have a growing business as a real estate agent. Bookkeeping and keeping the back end of business sharp and accurate is beginning to take time away from growth and I know this is not the best use of my time.
Im looking for bookkeeping services. I already have a CPA that does a great job for me. His team can offer services at $500/mo to manage bookkeeping for essentially 4 businesses.
Does this price make sense? Are there benefits to keeping booking in house with my CPA? Should I shop around? I’m not at all trying to be cheap and believe in paying for what you get. And I want it to be excellent. Just new to this arena.
Thanks for any advice!
I'm not at all against bookkeepers or CPAs or farming out functions.
HOWEVER: at your current size, I can think of several good reasons to be doing your own books:
1. It shouldn't be that complicated. I keep books for our portfolio which is well larger than yours. I spend a few hours on it each month. 3 properties wouldn't take me more than an hour a month.
2. No one should be in business that doesn't have an intimate understanding of their own finances. I assume you manage and balance your own personal checking & savings accounts? This isn't a whole lot different.
3. The money you would be spending for professional services when you are starting a business eats into your growth significantly. I hear this "my time is better spent at X" a lot, and the reality is for most people it's a convenient excuse to outsource something they don't want to do. Unless you are going to *specifically* spend the downtime making money, you're not making better use of your time from a financial point of view. Most small businesses require bootstrapping until they are rolling, because that money that's being spent could have been reinvested into things that actually make money.
Now, of course, if you are a complete dunce when it comes to money, maybe you should have some assistance, but it's hard to be a successful business owner and not understand money. And where your CPA may be worthwhile is reviewing your books at the end of the year when it comes time to file your taxes to make sure you're not breaking any laws, and that you are taking full advantage of tax breaks and existing code. In other words, spending money to make money.
Don't forget the cardinal rule of small business - spend as little money as possible on activities that don't directly bring in revenue, especially when you are starting out. Paying your CPA to review your books and find tax breaks brings in money. Paying your CPA to record transactions and reconcile your bank accounts does not. As a small business owner you should be able to demonstrate the financial value of all of your activities. If you say that the value is that the time you don't spend on this will let you make more sales, that's fine, but be honest with yourself about it because most people don't take that hour that they would have spent and make an hour's worth of sales calls that result in a sale, or do an hour's worth of deal reviews. They just coast.
@David Williams I think you could find something cheaper. We do the same thing for our clients but I'd say CPA firms will overcharge for what you're looking for. I have a bookkeeper that I recommend. Please PM me if interested.
The issue with bookkeeping is that it is a service that can take a long time(especially if you have different expenses every month) and it is a service that is often not appreciated by the general public.
Another issue is that getting a bad bookkeeper will cost more because someone else will need to fix it.
You may want to see if you can do the books yourself with the help of a CPA reviewing them on a quarterly basis.
There are features within most accounting software's that allow the bank account to be linked to the accounting software.
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