Article by Evan
Need a bookkeeper but unsure where to start?
Well, we have a treat for you.
While bookkeeping is not fun (at least for most people, but not us!), it is a vital business support function and one that requires time and skill to do it correctly.
In this article, we’ll walk you through 4 of the biggest mistakes eCommerce businesses make when approaching bookkeeping for their business. By the end, I hope you’ll avoid some draining pitfalls that some business owners stumble into.
Table of Contents
Can You Teach Yourself Bookkeeping? Sure, But You Need A Bookkeeper Rather Than Doing It In-House
If you’re smart enough to start a successful e-commerce business, you are smart enough to teach yourself how to do bookkeeping… but why would you?
Like any skill, it takes time to learn bookkeeping.
As a founder, CEO, manager (janitor, customer service dude/gal, website administrator, receivables collector, website design person, copywriter, copy editor, coffee getter…) you already have enough on your plate. And what you REALLY need to be doing if your business is profitable is to build core skills to help grow your business and fight in the trenches to ensure its success: management, entrepreneurship, strategy, sales, and marketing.
And really, as you grow, you need to spend most of your time on the first three. Those three define your role as a business leader… while everything else will be outsourced as your business gets more successful.
So where is Bookkeeping on that list?
Nowhere. It’s a vital support function but not something you should personally do yourself. You have a higher value to contribute than that.
So, should you bring someone on to help with the bookkeeping? You could sit them in the corner of your office punching away on yellow and grey 1980s tabulator or sliding beads on an abacus while you do big bossly kind of things.
Well, let me ask… What is your business?
I didn’t think so. So why are you trying to develop bookkeeping expertise in-house? Not only would this add cost, but you’d also have to manage them. Your time is limited, so you need to focus on building the core skills to compete.
Even if you have the skills, you still have to spend the time and mental energy managing your in-house bookkeeper.
Do you have enough to manage your books or an in-house bookkeeper?
Why bother, when you can get someone who loves bookkeeping to do it all for you? Seems like a no-brainer to me.
You Don’t Need a Bookkeeper, You Need A Bookkeeping Outsourcing Solution
The good news is you don’t have to become a financial expert and you don’t need a full-time bookkeeper on staff, there is a much more efficient way. Phew!
Outsourcing to a bookkeeping firm gets the work off of your plate entirely, there is no need to spend time hiring, firing, or managing internal staff. One less major headache to deal with!
With an outsourced bookkeeper, you are treated as a client, not a boss.
This means more focus on doing a great job for a valued client rather than someone doing as little as possible to get a paycheck. You might have been doing the same thing before starting your own business, coasting to the finish line, doing the bare minimum before starting your dream. I might have done that as well… (whoops).
Hiring Too Late When You Really Need a Bookkeeper For your Small Business Yesterday
Now, you might be asking yourself, do I need a bookkeeper for my small business? The likelihood is if you are starting to ask the question you already know the answer, yes!
It’s time to stop putting it off and make the decision so you can free up the capacity to concentrate on critical growth tasks instead of having the business run you. Yes, you really need a bookkeeper for your small business.
Just make sure you don’t make the fatal mistakes we are discussing in this blog.
One of the biggest mistakes small business owners make is trying to take on and do everything themselves.
Business owners have so much to do, planning is almost an afterthought. Don’t make that mistake. After launching nearly ten eCommerce businesses I can confidently say that it’s far easier to be proactive rather than reactive during your startup’s early life. Do yourself a favor.
Bookkeeping is a “never-thought,” let alone planning future bookkeeping demand. If you want to continue your success you’re going to need to think differently from the other business owners out there.
Managers turn to outsourced solutions when they are beginning to get swamped with bookkeeping work. By then it’s too late because you need to put critical business growth drivers on hold to find a solution. This hurts and lowers growth which means hundreds of thousands or millions in lost income eventually as your business doesn’t scale as high as it could or takes much longer to get there… ouch!
You Need a Bookkeeper Almost Right Out of the Gate
Now I have your attention, find an outsourced solution while you have spare downtime, and do it sooner rather than later. You’ll only get busier.
The best time to find an outsourced bookkeeping service provider for small businesses is when you start bringing in a couple of grand of revenue per month. By then you can pay for the service without issue, and you get to reclaim some of your time before you are buried in bookkeeping work.
To start with, it might seem like the bookkeeping can be managed in house by yourself, your partner, your friends, but things can pick up quickly and spiral out of control, fast.
Start the outsourcing process before you feel like it is needed so you can focus on scaling your business rather than having that nagging worry about the books. You need a bookkeeper for your small business even if you think you don’t.
Quick, bookkeeper needed for small business, help!
Outsourcing to the Cheapest Solution Is the Wrong Way to hire a bookkeeper
Another mistake made by business owners is becoming obsessed over price.
While it is important to be efficient and conscious of additional costs, a bookkeeper is not something to skimp on.
Outsourcing to the cheapest solution could cost you much more in the long run. Would you trust a mechanic who only wanted $20 to rebuild your engine? How about $60 for a plastic surgeon to give you a new nose?
When I started out in e-commerce, I hired a writer who offered to write me well-researched articles for $10 per 1000 words. It was a fantastic deal, and his first article or two were decent. But, over time, the quality started to get quite spotty and there were repeated mistakes that he simply didn’t stop making.
Eventually, I realized that he was probably outsourcing himself to a writing sweatshop where people with very poor English skills spat out as many articles as possible to maximize revenue, so I fired him.
It is easy to find very cheap staff but this will likely lead to major account errors: missing transactions, double transactions, wrong classifications, even theft. Price often reflects the value on offer.
Your business finances are critical to your firm’s survival, never-mind success. Trust someone who is priced appropriately in line with competent providers in the West. This helps protect against (but does not guarantee the absence of) poor quality work or dodgy providers.
If you buy cheap, you will end up buying twice and lose time and money in the process. Trust me on this one. I ended up buying repeatedly before finally cluing into the mistake I was making.
At this point you might be starting to wonder, why do I need a bookkeeper for my eCommerce business?
Have you not been paying attention?!?
If you need a dedicated post on the critical importance of bookkeeper to drive it home, click here.
Outsourcing to Generalists When You Need a Bookkeeper Specialized in E-Comm
Need bookkeeper recommendations?
Sure generic bookkeepers are easy to find, but you need a bookkeeper that understands your business or you’re facing an uphill battle.
This final fatal outsourcing mistake is not hiring a specialized eCommerce bookkeeping firm.
Selecting a service provider with competence in your niche is important to the quality and speed of the work produced.
With e-comm, this means being able to find files, navigate platforms and accounting software, and provide timely and accurate work. While a generalist is likely to be technically competent, it is unrealistic that they will know the quirks of the industry.
It is important to find out if your bookkeeper has the relevant e-commerce experience, a minimum of 5 years, if not it could be fatal to your business success.
You also need to find trustworthy people who are competent hires and efficiently get the work completed. Look for a firm that can give you feedback on how you’re running your business because they have a depth of experience and have done it themselves.
Etail Express was formed to do exactly that, we focus on providing small and medium eCommerce businesses with high quality and reliable bookkeeping that operates in the background. We hire the most experienced and knowledgeable people we can find and build a deep pool of talent to tap into to ensure that there are no disruptions.
We specialize in eCommerce bookkeeping with a cornerstone in disaster cleanup work, as well as regular monthly bookkeeping, and helping founders new to professional bookkeeping get started. Check out our virtual eCommerce bookkeeping service page for more details.
At this point you may be thinking, do I really need a bookkeeper for my small business? Yes, you definitely do and you won’t regret it if you avoid these fatal mistakes! If you’re not sure why re-read the article.
And there is no harm in finding out. With our free 1 Month Trial, No Contract, And 6 Month 100% Refund Guarantee there is no reason not to sign up now!