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Is it worth the time for a general small business owner to hire an outside bookkeeper to keep their books for them?

In this audio snippet, you'll hear about:

• A small business owner cannot manage a small business effectively if they don't have their own accounting background. Just know the basics.
• A small business owner needs to know basic accounting

Travis: That is a nice sag into my next question. It is worth the time for a general small business owner to hire an outside bookkeeper to keep their books for them?

Yosef: Great question, Travis. My answer to that question is based on the following. I don't believe that a small business owner is going to be able to manage a small business effectively if a small business owner does not have his or her own accounting background.

Travis: OK.

Yosef: You have to know accounting basics. It doesn't take that long to learn. To operate a business effectively and efficiently, a small business owner needs to know basic accounting. He doesn't need to know all the bells and whistles of complicated transactions, but should know the basics and know how the software works.


Two reasons. First of all, they won't destroy their accounting records which is more difficult for a bookkeeper. Second of all, your business is about making money. To make money involves a number. You need to know how much money you made. To know how much money you made, you have to use a system that monitors numbers. You have to be on top of that system. Not being aware of what is going on in your business is not going to make you money. Money doesn't happen by itself.


There are a lot of reasons why business that are operating with healthy margins at the end of the day still don't make money. One of the most common issues in that respect is a secular problem, which a veteran banker named Bill Cochran, a professor of mine at UCLA in the Business School, tried to explain to me a while back and it is really important.


You may have sales in the millions, but depending on what your margins are like, depending on how quickly you are collecting cash from your customers, you will still be cash poor and can still go bankrupt instantaneously. So it is really important that a small business owner, before entering into business, have some basic knowledge.


If a small business owner relies on somebody else, one of two things will happen. There will be a miscommunication of expectations, what a small business owner expects and what a qualified bookkeeper will actually do.

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