From Data to Decisions: Why Your Bookkeeper might not be enough for Small Business Financial Success
You’ve probably heard that hiring a bookkeeper can substantially transform your business and that having one can help with financial decision-making.
That’s why you hired yours, right?
Maybe finances got too complex and things got lost in the shuffle, which made taxes a nightmare. Or maybe your spreadsheets got too time-consuming to manage on your own — and DIY’ing Quickbooks seemed too overwhelming. Or juggling financial tasks yourself was distracting you from delivering your best products or services.
As your business grows, so do the number of financial transactions, tax obligations, and payroll responsibilities you encounter.
But as complexity increases, financial decisions become more important, and you need to maintain a clear picture of your company’s financial health; your bookkeeper might not be doing enough.
Is your bookkeeper doing enough?
When you hired your bookkeeper, you might have thought:
“Hmmm — I need financial advice for my business.”
“Maybe — I need someone to teach me how to run my business finances.”
“Great — I need someone else to take over the finances of my business.”
These are common expectations when small business owners hire a bookkeeper.
But you might be surprised to learn that these aren’t actually services that most bookkeepers are going to provide.
What to expect from a standard bookkeeper
Bookkeepers are generally limited in the kinds of services they offer. Standard bookkeeping services include:
- Organizing your records of financial transactions like sales, purchases, receipts, and payments. This foundational work ensures that all financial data is accurately documented.
- Reconciling bank statements, which means comparing your business’s financial records with bank statements to ensure everything matches up, identifying any discrepancies, and getting them cleared up.
- Processing payroll, ensuring employees are paid correctly and on time while maintaining accurate payroll records.
- Generating basic financial reports like profit and loss statements, balance sheets, and cash flow statements, which provide a snapshot of the business’s financial status — as long as you understand them. (More on that later.)
- Preparing and submitting sales tax returns to comply with local and federal regulations.
But there are a lot of important financial responsibilities that aren’t accounted for in that list!
You might be missing financial insights
If you’re looking for business financial advice, systems guidance, someone to explain your numbers to you, or anything else…
Your bookkeeper might not be able to help.
Despite the essential services bookkeepers provide, experts in this field typically don’t offer analysis or explanations of financial data. So while they can record your financial transactions and produce reports, they often don’t interpret this data to give you meaningful insights. For instance, they might record your transactions, but they usually won’t analyze them and teach you how to understand trends.
Without actually being able to interpret your data, financial reports aren’t going to help you make healthy financial decisions or reliable projections — or avoid harmful issues that might come up.
Bookkeepers also generally don’t have the capacity to offer strategic financial advice or education. Their focus is on maintaining accurate records, not on guiding your financial planning or strategy. They may hand you your financial statements, but they won’t teach you how to understand them.
Uh-oh.
Furthermore, bookkeepers typically don’t provide high-level financial strategy services, like financial reporting, budgeting, forecasting, or financial goal setting.
These are all tasks that are most effective when they’re paired with bookkeeping! But they also require a different skill set that bookkeepers often don’t possess — or simply aren’t interested in. So despite the compatibility of these responsibilities paired with standard bookkeeping tasks… Bookkeepers often simply don’t offer them.
When you have a bookkeeper who reports numbers but doesn’t go the distance to educate and advise you, you might feel just as lost in your numbers as you did back when you were inputting everything into a spreadsheet. After all, numbers are just symbols on a page unless you understand what they mean.
And the problem is bigger than just feeling frustrated, confused, overwhelmed, or uncertain.
When your bookkeeper reports numbers without communicating the significance of those numbers to you, you’re left with a collection of financial data and little understanding of what it means for your business.
This creates an enormous gap in understanding that can lead to risky financial decision-making, cash flow problems, and missed growth opportunities.
Even the language around bookkeeping can be confusing. Someone should help you feel comfortable speaking it.
Like most industries, the financial industry has its own jargon — all those weird little words and acronyms that you’d never use chatting with a new date over coffee.
Assets.
Liabilities.
Equity.
Revenue.
Profit & Loss.
Balance Sheet.
Cash Flow.
Financial reports often come with specialized terminology that can be confusing if you’re not familiar with it. When bookkeepers simply hand over your documents without explanation, it can leave you feeling overwhelmed and in the dark about what it all means — and more, what it means for your business’s financial situation and future.
So, how can you support your financial decision-making?
To bridge this gap, you need the right support.
This includes consistent meetings with a bookkeeper who will not only provide you with financial data but also explain what it means and offer actionable next steps. A bookkeeper who takes the time to educate you on your financial reports can significantly enhance your financial literacy, empowering you to make informed decisions.
At C2 Accounting, we go beyond standard bookkeeping services to provide a comprehensive financial partnership that supports your business growth.
Here’s what sets us apart:
Educational Support: We believe in empowering our clients with knowledge. Our team provides training and resources to help you understand your financial statements, improve your financial literacy, and make financial decisions easier. Yes, including all those weird bits of jargon and bookkeeper vocabulary that sound like a foreign language. When something is new or confusing, you won’t have to Google it or ask ChatGPT for a sketchy summary. The educational support we provide at C2 Accounting bridges the gap between data and understanding, giving you the tools you need to succeed — and real, live humans to ask for help.
Financial Analysis and Insights: We don’t just record your financial data — we analyze it and provide you with valuable insights into your business performance. This includes identifying trends, opportunities for cost savings, and areas for improvement. When we take the extra step to show you what your numbers actually mean, you become empowered to make the most strategic decisions for your business.
Client Profitability Tracking: We help you understand which clients are most profitable and where you might be breaking even (or even losing money). This information is crucial for making strategic business decisions, like deciding what services or products to focus on. It enables you to put your energy and resources into your most profitable activities and clients, so you can bring in more revenue in less time and with less stress.
Customized Financial Advisory Services: Our team can act as part of your financial advisory team, helping you make informed financial decisions that drive your business forward. We offer guidance on budgeting, cash flow management, and financial planning tailored to your unique needs. This personalized approach ensures that your financial strategy aligns with your business goals.
Comprehensive Controller Services: There’s one of those vocab words again. A Controller, or a Comptroller, oversees an organization’s financial health. (You might have voted in your local government’s Controller election at some point.) When it comes to C2 Accounting, what that means is that we can act as your full-service accounting department, handling everything from bookkeeping to financial strategy. This can include detailed financial reporting, budgeting, forecasting, and financial decision-making. By integrating these services, we can provide a holistic approach to managing your business finances.
Dedicated Support Team: You get access to our team of experts, including a Bookkeeper Manager, Bookkeeping Team Leads, and Staff Bookkeepers, ensuring you receive prompt, personalized, thoughtful service. This team approach ensures that all your financial needs are met efficiently and effectively — and with humanity.
Financial Insights: understanding your financial data matters
Understanding your financial data enables you to make the kind of decisions the success of your business relies on. When you have a clear picture of your financial health, you can identify where to invest, where to cut costs, and where to expand. This informed decision-making process is vital for the growth and sustainability of your business.
Recognizing trends and potential issues early allows you to address them before they become significant problems. For example, when we’re running your numbers, we might notice a consistent decline in sales through your financial reports. We’ll share that insight with you so you can take corrective action before it impacts your business negatively — instead of realizing too late, when revenue no longer covers your expenses.
Maintaining and improving the overall health of your business hinges on understanding your financial data. It’s not enough to just have access to the data — you need to really understand it in order to ensure long-term success and stability.
If you have a bookkeeper but don’t understand your numbers, let’s reconfigure your approach.
Understanding your financial data is essential for informed decision-making and maintaining the overall health of your business. By getting the right support you can bridge the gap and take your business to the next level.
Ready to explore how C2 Accounting can help you grow your business and answer all your finance questions?