7 Signs Your Wichita Business Has Outgrown DIY Bookkeeping

You’re always behind on the books

If it’s August and you’re still trying to finish May, that’s a problem.

Not because every business needs perfect financial statements on the first day of the month, but because old numbers aren’t very useful for making current decisions.

You should be able to get a reasonably current answer when you ask questions like:

• Did we make money last month?
• How much are we spending?
• Are receivables getting too high?
• Can we afford another employee?
• Do we have enough cash for the next equipment purchase?

If the books are several months behind, you’re driving the business while looking in the rearview mirror.

Accurate bookkeeping is useful when it happens consistently—not when everything gets cleaned up once a year before the tax return is prepared. Reliable accounting records also make tax preparation, cash-flow management, and financing much easier. See what a dependable monthly accounting process should include.

You’re making decisions from the bank balance

This is incredibly common.

There’s $70,000 in the account, so things must be going well.

Except maybe $18,000 belongs to payroll next week. Another $15,000 is needed for materials. Sales tax hasn’t been paid yet. A truck payment is coming out. Several large vendor bills haven’t cleared.

The amount sitting in your checking account is important.

It is not the same thing as profit.

Good monthly accounting should help an owner understand the difference between cash coming in, cash going out, what the business owes, and what the business is actually earning.

That becomes increasingly important as a company adds employees, equipment, debt, inventory, jobs, or locations.

Tax season is a yearly emergency

If every January starts with digging through email, finding receipts, categorizing a year of transactions, and trying to remember what happened eight months ago, the problem isn’t really tax season.

It’s the process during the other eleven months.

Your tax return should largely be the end result of accounting work that has already been happening throughout the year.

That also creates an opportunity for better tax planning.

There is a big difference between knowing roughly what happened after December 31 and having useful financial information while there is still time to make decisions.

Year-round bookkeeping, accounting, and business tax preparation and planning are commonly offered together for exactly that reason.

You can’t tell which jobs are actually making money

This one matters especially for contractors and other project-based businesses.

You may know what you charged for a job.

But what did that job actually cost?

• Labor
• Materials
• Subcontractors
• Equipment
• Fuel
• Permits
• Overhead
• Callbacks

It’s entirely possible to stay extremely busy while making less money than you think.

For a contractor, excavation company, trucking business, fabrication shop, or other project-driven company, accounting should eventually become more than recording expenses.

You need information that helps you understand what type of work is worth doing again. Learn more about accounting for construction and trades or trucking and transportation.

You’re spending nights or weekends doing accounting

Being able to do something yourself doesn’t necessarily mean doing it yourself still makes sense.

Owners have limited time.

If you’re spending Saturday morning reconciling QuickBooks, entering receipts, tracking down payroll information, or trying to figure out why an account is off by $1,800, that time has a cost.

Could you have used it to:

• Quote another project?
• Follow up with a customer?
• Train an employee?
• Collect an invoice?
• Work on the next hire?
• Spend time away from the business?

There comes a point where taking accounting work off the owner’s plate isn’t an expense added to the business.

It’s part of building a business that doesn’t depend on the owner doing everything.

Your accountant mostly exists at tax time

There’s nothing inherently wrong with having someone who prepares your tax return once a year.

For some businesses, that’s all they need.

But as a business becomes more complicated, owners often start needing answers throughout the year.

• Should we buy this equipment?
• What is happening with cash flow?
• How should this loan be recorded?
• Are the books ready if we apply for financing?
• Are we making enough money to hire?
• Are our estimated tax payments still reasonable?

Your monthly bookkeeping, financial reporting, payroll activity, and tax situation all affect each other.

One reason Midland Valley Accounting was built around an outsourced-accounting model is that we think growing businesses benefit from having those pieces work together rather than being spread across several people who rarely communicate.

You need more accounting help, but you definitely don’t need an accounting department

This is the group we see as the sweet spot.

You might have five employees. Or fifteen. Maybe several trucks. Some equipment. A line of credit. Payroll every other week. A handful of credit cards. Jobs happening all over South Central Kansas.

That business may have become far too complicated for the owner to manage the financial side casually.

But hiring a controller, staff accountant, bookkeeper, payroll person, and tax professional internally would make absolutely no sense.

There’s a large gap between doing everything yourself and building an internal accounting department.

That’s where outsourced accounting fits.

A business can get consistent bookkeeping, reconciliations, payroll support, tax preparation, financial reporting, and year-round help without building that entire function in-house.

So when should you make a change?

There isn’t one magic revenue number.

A $500,000 company can be complicated. A $3 million company can be surprisingly simple.

What matters more is how many moving parts there are and how much responsibility is still sitting with the owner.

If your books are current, your accountant is responsive, your taxes are planned for, and you understand your numbers, you may already have exactly what you need.

Keep it.

But if the books are always behind, you’re doing too much yourself, you don’t trust the numbers, or you rarely hear from your accountant outside tax season, it may be worth taking another look at the setup.