If you’re a business owner, you can likely recall at least one time when you’ve been stuck in the office late balancing the books and thought to yourself, “I need a bookkeeper.” Sometimes you may want to do it all, but tackling everything yourself can become overwhelming and detract focus from your business goals.
Read on to learn how to hire a bookkeeper, tips and questions to ask, and the benefits of handing over the work to the pros.
DIY bookkeeping isn’t for everyone. Businesses grow, and with that comes additional financial paperwork and tasks. Sometimes small business owners can’t do it all, and that’s OK—it’s a natural part of growing your business. Here are some common signs that it’s time to hire a bookkeeper:
If you have old receipts and a huge backlog of paperwork sitting at your desk or on your computer, this is one of the top signs that you probably need some help.
Being behind in tracking your expenses and books is a signal that you don’t have a strong enough handle on your company’s finances. Hiring a bookkeeper can get you back on track and help you better understand your financial situation.
Maybe you’re not feeling confident enough with your bookkeeping skills and are unsure of where to begin—after all, you can’t be an expert on everything! Not having strong bookkeeping skills can also allow errors to occur. Hiring a bookkeeper can reduce the chances of errors in your books and give you more peace of mind.
If you’re racing to get your books prepared for tax season and you feel generally behind on your taxes, you may want to hire a bookkeeper to handle that for you. If you don’t have your books clean and your financial records organized, you’ll have a harder time filing your taxes.
Managing accounts payable and accounts receivable can take a significant amount of a business owner’s time: research by QuickBooks shows that 1 in 4 small business owners spend six to nine hours each week managing the money in their business.
You may know that payments will come from your clients or whomever you’re working with, but you don’t have a clear idea of when or how much it will be. Hiring a bookkeeper will allow you to become more organized with your cash flow statements to get a better view of your financial situation.
Accounting and bookkeeping are two different things. Accountants have more education under their belts, and with additional qualifications come higher rates. Bookkeeping requires fewer skills and work, so hiring a bookkeeper instead of an accountant can save you money in the long run.
If you feel like you never have time to get your books updated and it’s taking up resources to do it yourself, a bookkeeper can help reduce the time you spend on financial tasks. You may also feel like it’s time to take a break from the grind and focus on other things that your business or clients need.
Bookkeepers can be a great solution if you find that managing your business finances is becoming challenging. Hiring a professional to do the work for you can free you up to focus on growing your business. Here are some bookkeeper responsibilities and their main functions:
Bookkeepers perform financial tasks, such as:
Additionally, these are the top financial statements that bookkeepers provide with their services:
Still unsure if you need to hire a bookkeeper? There are many benefits of doing so. Although bookkeeping services cost money, they can save you time in the long run and make your life much easier. Consider the points below if you’re in need of more persuading:
If you’re thinking these benefits would be a great help with your business growth, read more for tips on how to hire a bookkeeper.
If you’re ready to find a bookkeeper to help you manage financial tasks, here are a few considerations to help you hire the right bookkeeper for your business:
Many small businesses start out by outsourcing bookkeeping services, but depending on your needs, you may also consider hiring a full time bookkeeper as an employee at your business.
Employee bookkeeper: An employee bookkeeper usually costs more, but may be a good fit if your business is growing rapidly or has a high volume of financial transactions.
Contract bookkeeper: Outsourcing your bookkeeping to a contractor or freelance bookkeeper is a good way to get the support you’re looking for, without needing to add a full-time employee to your team. These are often the most cost-effective professionals, but skills between freelancers can vary vastly, so be sure to review your prospective bookkeepers’ credentials.
Pro tip: Once you’ve decided whether you need full-time or part-time services, it’s a good idea to reassess your needs over time to ensure you still have the support your business needs.
Be sure to ask for referrals. You can also ask friends or colleagues who have utilized bookkeepers for their businesses. Recruiters are also an option, but word of mouth is often cited as the most trustworthy way of figuring out if a professional is qualified and will perform to your standards.
Pro tip: Do not pick the lowest priced bookkeeper—“you get what you pay for” is a saying that’s very true when it comes to these services. Consider spending a little more to get credible and skilled services.
After you’ve figured out what type of bookkeeper you need, determine what bookkeeping process best suits your company. Paper-based bookkeeping means gathering your physical papers and records and reviewing them in person. Digital bookkeeping is usually a cloud-based process of tracking records, and is the preferred method for most small businesses today.
Pro tip: An advantage to digital bookkeeping is having instant access to your financial information wherever you are.
With all of these factors in mind, you’ll be ready to dive into your bookkeeper search and feel more confident knowing what’s right for you and your business.
Relying on a professional bookkeeper can make your life much easier as a business owner, but it’s important to hire one that is skilled and fits well with your company’s goals. Below are some helpful considerations and what to look for in prospective bookkeepers:
Become familiar with the prospective bookkeeper’s qualifications and credentials. Since nearly anyone can call themselves a bookkeeper, you’ll want to ask about their background. Many bookkeepers will have a degree in accounting, be a CPA, or even be registered with the Tax Practitioners Board.
Understand the different services that are offered. This may vary depending on if the prospective bookkeeper is working solo or with a bookkeeping firm. Knowing this gives helpful insight into what they can handle so you can take full advantage of their services. You might also want to think about what you really need as a business to see if their services are in line with your needs.
Bookkeeping covers many different industries, so it’s important to make sure that the person you hire is familiar with the industry your business operates in. Look into the industry-specific expertise they have to get a better idea. You may also want to see if they’ve handled bookkeeping for other businesses that are around the same size and structure as yours.
Communication styles are sure to vary between bookkeepers, so consider looking into how they interact with their current clients. A good bookkeeper should keep honest and open lines of communication at all times—this ensures that their clients are in the loop and on the same page.
To see if their communication style is in line with your own, you can ask if they prefer email or phone calls and how often they typically touch base with their clients.
Make sure you’re on the same page about their pricing structure to avoid any billing hassles or hidden costs. Once you get an idea of how much they charge, compare it to other reputable bookkeepers.
Asking what kind of accounting software your bookkeeper uses is important because it determines whether or not you’ll have administrative rights. If you don’t have rights to the software, you may have issues accessing your financial information if you don't have access to the software your bookkeeper uses. The bottom line here is to make sure you have access to the data and files the bookkeeper will be working with to ensure transparency.
Sometimes bookkeepers work independently. If your prospective bookkeeper does, you should consider what you’d do if they’re sick or call out for other reasons—have a backup plan in case your bookkeeper is out of office.
If the prospective bookkeeper operates in a firm with multiple employees, there will be more hands on the day-to-day processes. In this case, it’s important to see what the firm’s internal review and quality control procedures are.
While accountants and bookkeepers have common goals within a company, there are some key differences to be aware of, especially if you’re in the market to hire some help. Here are the main differentiators between the two:
A bookkeeper can’t be an accountant without proper certifications. Bookkeepers manage the daily task of keeping records. Since bookkeepers aren’t required to have the same level of credentials as accountants, they are often cheaper to hire and can save your company money.
Accountants are usually more skilled and in a more advanced position than bookkeepers. Being an accountant usually involves a higher level of interpreting and forecasting numbers than bookkeepers, who mainly just keep the records.
Accountants also go through formal training to obtain a degree or certification, whereas bookkeepers do not. This makes hiring an accountant more expensive than hiring a bookkeeper.
Check out these frequently asked questions and tips to help you decide whether or not to hire a bookkeeper:
Some bookkeepers do provide tax preparation services, but usually, they’ll be doing it from their own experience, as not all bookkeepers are professional tax advisors.
Even if you choose to have a tax preparation professional handle filing for you, working with a bookkeeper throughout the year can help ensure your books are clean and ready come tax time. It is typically easier to maintain clean books throughout the year rather than trying to prepare for taxes when tax deadlines are already close.
If your accountant also does your bookkeeping, you don’t need to hire a bookkeeper. Some accountants don’t perform bookkeeping tasks, in which case you may want to hire a bookkeeper. Check to see what services your accountant offers to be sure. Having an accountant that handles both responsibilities can sometimes be more costly.
A great bookkeeper doesn’t have to be local. Taking advantage of virtual bookkeeping services can make the process more streamlined and easier to access paperwork and other statements online, rather than having to meet in person.
The amount bookkeepers charge will depend on where they’re located, experience, industry type, and other services needed.
Being attentive to your business as it’s growing is crucial when it comes to reaching your goals. Luckily, bookkeepers and bookkeeping software are here to take the stress out of daily administrative tasks and sort out that mountain of paperwork. Focus on your business and hire a virtual bookkeeper with QuickBooks Live Bookkeeping. Take advantage of books that are 100% accurate from bookkeepers with over 10 years of experience for confidence and peace of mind.
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