In the current economic conditions, the small business owner is watching his/her dollar very closely. It’s possible that small business owners are doing their own marketing, bookkeeping, website maintenance, etc. to save a few bucks. But what does that do to their productivity? While they may be very busy, their time is being spent on non-income producing activities. It is a common trap for the small business owner.

Consider the three different scenarios:

1. Sally is a consultant and has decided to do her own bookkeeping in order to save some money. Sally is not an accountant by trade, but understands the basics well enough she can do it on her own. Since this is not one of Sally’s core competencies; she spends more time on bookkeeping than she would like. She finds herself staying up late and working on the weekend to get all of her work done. Her work/life balance is suffering and her revenues are not increasing. Sally needs to delegate her bookkeeping tasks to someone else.

2. Joseph is a co-owner of a medical practice. He has been responsible for managing the books for a few years. He is comfortable with the task and is a little hesitant about outsourcing this responsibility to someone else. Yet, he knows doing so would free up some of his time to spend on revenue generating activities. Joseph decides to trust a bookkeeper to handle his accounting. He remains active in reviewing the books and verifying the data has been input correctly. A few months pass and Joseph finds that he is spending as much or more time on the books because the bookkeeper doesn’t seem to understand his business. While it is still a good idea for Joseph to outsource this task, he should find an accountant who knows his industry better than his current bookkeeper.

3. Beth is the owner of a retail store. Between staffing issues, ordering product, overseeing inventory and customer service she has realized she doesn’t have time to do her own bookkeeping anymore. Beth decides to interview at least three bookkeepers before choosing one. She finds one who has a experience in the retail industry. She asks for and contacts a few of the accountant’s references. She decides to go with Cooper’s Bookkeeping Services. Each month an accountant from Cooper’s meets with Beth to review her financial statements. Beth maintains control of the receivables and payables so she knows approximately what her revenues and expenses should be each month.

In all of the scenarios, the business owner was spending valuable time on non-income producing activities. While it didn’t seem to work out for Joseph, it could. It might have helped had he interviewed a few bookkeepers, like Beth did, to make sure the one he hired had the applicable expertise for his industry.

When a business owner can review the numbers s/he is able to see trends that s/he might not have been able to catch when doing the data entry. Taking a step back from the data entry allows us to see a different perspective. From here our decision making ability changes dramatically, for the better.