Why You Should Invest In Bookkeeping In 2023 (Forecasting Provided)
There’s a golden opportunity for your business to grow in 2022.
bookkeeping gives your business a strong competitive advantage. It helps you identify any possible capital gains or losses from transferring property.
I don’t recommend doing it manually, as it’s error-prone and slow.
We reviewed the overall demand for bookkeeping services in the United States over the previous five years, and we’ll share our findings with you.
Bookkeeping grew significantly, but this year peaked due to many events.
We’ll speak about the growth in depth and our forecasting in 2022.
As you may see, the graph rises at a specific time each year, and here are the specifics:
- From Jan 29 to Feb 8, 2017: 80/100
- From Feb 4 to Feb 10, 2018: 87/100
- From Jan 27 to Feb 10, 2019: 82/100
- From Jan 26 to Feb 2, 2020: 95/100
- From Jan 31 to Feb 6, 2021: 100/100
The boost comes in the first quarter of every year, owing to businesses wanting a bookkeeper to account for and arrange their financial activities at this time (after completing their year-end bookkeeping).
The reason for this year’s demand as most firms, after the lockdown, opted to return their employees to the office rather than working from home, resulting in higher costs.
As you can see in the graph, the demand strength has fluctuated fairly significantly over this period.
The year I started with a strong demand for bookkeeping services.
After this point, bookkeeping firms raised their prices to match the high demand of February, and starting from June, they have helped balance the budget again.
Every year we see an overdemand of bookkeepers in January and February, filled in June and July.
This phenomenon has been going on for 5 years now, but it is particularly noticeable this year.
2021 was a game-changer for blogs and media outlets alike.
According to Muck Rack, there was 3.195 articles were written in May 2021 (the following month after the demand growth phenomenon)
In the same month, 1,495 unique media outlets, covered this phenomenon, including Forbes, Business Insider, and Yahoo Finance.
We discovered that Montana has the greatest unmet need, followed by Alaska, Oregon, South Dakota, and New York.
- Montana: 100/100
- Alaska: 95/100
- Oregon: 92/100
- South Dakota: 83/100
- New York: 82/100
Some of these states are more in need of bookkeeping services because the cost of living is high and has been for several years.
The lack of extra income means that people don’t have enough money to hire a bookkeeper even if they want one, which is why we continue to see such a strong demand in these states.
We also discovered that the main issue faced by companies who do not hire a bookkeeper and opt for accounting software is that they require training and must be constantly managed.
This means they are often more expensive than hiring a bookkeeper in the long run, so we don’t see it being a significant factor for this industry.
Forecasting in 2022
We forecast that by 2022, the bookkeeper demand will decrease to 90/100.
We can’t rule out the possibility that certain companies will stop allowing their employees to work from home, which would impact bookkeeper job openings.
So to be specific, Here are some reasons why:
- People leaving the industry (not just retiring): A small number of businesses will shut down or lose a lot of money and, in turn, need to lay off staff.
- Bookkeeping firms could leave the market, too, if they no longer wish to operate under such high demand.
We don’t think this will happen for a while, but it is always possible.
- The growth of data entry: Businesses are using more advanced technology every day, and some companies prefer accounting software rather than bookkeepers.
This is not recommended, as hiring a bookkeeper or accountant can assist you more than simply using the software.
However, we don’t think this will be a significant player in the demand for bookkeeping services, and you should always hire a professional.
What does this mean for you as a business owner?
We suggest you start looking for a bookkeeper now as the demand has already risen.
You may not see one immediately because many people are waiting for this trend to begin, but you will regret it if you don’t hire a professional quickly.
Simply If you don’t hire first, your rivals will.
In addition, it is essential that you have your financial plans and documents in order and that you provide the bookkeeper with the correct information.
If this is done correctly, you should see some great benefits within a few years.
There are 5 signs that tell that bookkeeping is a must for your business:
#1: Relying on software instead of hiring professionals
Intuitive software, like QuickBooks, has a significant upside and a potential downside.
As with other skills, the right tools can make your small business accounting more accessible and efficient.
However, no tool is capable of replacing knowledge and experience. You risk misinterpreting and underestimating your books if you rely too much on software solutions.
According to Glassdoor, the average pay for a bookkeeper in the United States is $40,361 /yr, so it is worth hiring someone good.
You may outsource your books to professionals with prior knowledge of your industry.
So bookkeeping would be a great start if you plan on investing in your business in 2022.
#2: You’re unsure how to utilize all of the tax deductions available to you.
You may be missing out on tax credits and deductions your business is entitled to claim if you don’t have a bookkeeping expert on your team.
Many businesses discover that hiring a bookkeeping firm to manage their financial affairs is less expensive than dealing with the tax system’s complexity on their own.
While you may not have the time or resources to keep your books in order, your accountant can.
#3: Your firm is unorganized.
Is your company’s accounting situation in order? The financial status of your firm affects its infrastructure at all levels.
You can’t effectively manage or navigate a firm with accounts left to keep themselves.
A solid accounting foundation is essential for increasing productivity and establishing future expansion possibilities.
If you have a systematic approach to your bookkeeping, your financial situation can run smoother in the future.
#4: You’re not earning as much money as you might be able to.
Here’s the short answer: get a good bookkeeping service if you want to boost your income.
By increasing company productivity and efficiency and lowering late fees, interest charges, and missed tax benefits while also providing time for the entrepreneurial spirit to strategize, negotiate, and ultimately create a more significant amount of revenue, this single choice can significantly increase your profits.
#5: You never have time to grow your business
The sooner you have a good bookkeeping service, the sooner you can focus on core activities essential for growing your business.
Every hour you spend managing your financial accounts is an hour you could be used to expand your company’s services, products, and client relationships.
Hiring out your bookkeeping services might allow you to devote more time and mental energy to what you do best – growing your business.