6 signs you need to upgrade your business bookkeeping

Here you are again, burning the midnight oil to reconcile your bank statements. Are you spending more time crunching numbers than enjoying the fruits of your labor? It might be time to upgrade your business bookkeeping system.

As your business grows, your original accounting system won’t make sense anymore. Keeping a general ledger in a spreadsheet is too basic for a growing enterprise. Are you getting in the weeds trying to do your own bookkeeping? You may be able to save time and money by upgrading to a new bookkeeping system.

Do these sound familiar? It’s time to upgrade your bookkeeping

There are some common red flags that signal your business’ bookkeeping is not up to scratch. Some common themes include: wasted time, wasted money, and lack of compliance. If any of these scenarios sound familiar: you may need to overhaul your bookkeeping system.

You spend more time on bookkeeping than your business

If your DIY bookkeeping system is taking up all your time, who is running your business? Too many business owners waste hours entering transactions and finding accounting errors. This is all time that could be spent winning new business or inventing new marketing ideas.

If your in-house finance lead is also doing daily bookkeeping, ask whether that is the best use of their time, and who is responsible for each task.

You’re always behind on your business bookkeeping

You just can’t seem to get ahead in your bookkeeping anymore. As a business grows, its financial records get more complex. If catch-up bookkeeping is your only form of bookkeeping, there is a problem. The health of your business will suffer if you can’t get an accurate snapshot of your accounts payable and accounts receivable when you need it.

When you try to do your own books as an expanding organization, mistakes become more likely. You are dealing with more transactions, and the shortcuts that worked when you were small may not apply anymore. Larger businesses often need to switch from single-entry bookkeeping to double-entry bookkeeping and make other structural changes to stay current.

You have reached the limits of your current software

Entry-level accounting software plans have their limits. Many cap the number of users or the people you can pay through payroll, and some limit features such as multi-currency, projects, or reporting across several entities. If you keep working around your system with spreadsheets, check your plan against what you need. The fix isn’t always new software: sometimes it is a different plan, or a cleaner setup of the system you already have.

Your business’s tax seasons are always chaotic

Do you find yourself in chaos as every filing deadline approaches? Tax season means tracking income tax, payroll taxes, sales tax where it applies, tax deductions, tax credits, and more. Plus, staying compliant on payroll taxes is how you avoid IRS penalties for late deposits¹ and filings.²

Despite the complexities, filing your taxes doesn’t have to be a nightmare. If it is, you are probably not using the right bookkeeping system.

Your cash flow is unpredictable

A good business bookkeeping system helps you strategize. You should be able to estimate peak seasons, low seasons, and estimate overhead costs. Another sign that it’s time to upgrade your bookkeeping is that you can’t forecast your cash flow. While there could always be other things at play as well, inconsistent record keeping makes it more difficult to predict when customers will pay and when your bills fall due.

You can never get hold of your bookkeeper

Your financial records should not be a mystery. Do you struggle to contact your bookkeeper when you have a question about a bank statement, or you need a balance sheet? This is a sure sign that you’ve outgrown the person or service that you currently work with. You should always have your own access to your accounting software and records, and a named person responsible for your books who answers your questions in good time.

Have you outgrown your business bookkeeping system? Whether you are trying to do it all yourself or you just have a bookkeeper who can’t keep up with your growth, it’s wise to bring in reinforcements. Visory is a business bookkeeping service that runs bookkeeping, payroll, accounts payable, and accounts receivable for growing businesses, with a dedicated team and its AI, Delphi, overseen by that team. Book a discovery call to see if we can help.