For almost all small businesses – especially startups – the answer to the question of “should I hire a bookkeeper?” is “absolutely, yes.”
While bookkeeping seems easy, it’s very easy to mess up if you don’t fully understand accounting principles. And while most business owners think they’ll have time to deal with the company books, they just don’t. It’s the task that always gets shoved to the bottom of the to-do list, especially when you’re just starting out and trying to save money by doing everything yourself.
But skipping those regular financial tasks can cause a lot of problems, both year-round and at tax time. Worse, ignoring your bookkeeping can end up costing your business lots of money.
10 Benefits of Hiring a Bookkeeper
Most small business owners start out trying to manage the books themselves – usually to save money. But when you’re trying to build a business, serve your customers, and have a life, accounting just seems less important. Something you can put off til next week… next month… tax time.
I’ve had many small business owners reach out to me when they’re desperate to get their books in shape. They need to do their taxes. Or they’re trying to get a loan. Or they can’t figure out which customers haven’t paid them. And when they finally do ask me to handle it for them, they always wish they’d done it sooner.
Having someone to take care of the day-to-day bookkeeping and accounting will benefit your company in many tangible ways. Here are the ten biggest benefits of hiring a bookkeeper:
- You won’t be overwhelmed by all of the financial details.
- Your books will be up-to-date.
- Your customers will get invoiced promptly.
- Unpaid customer invoices won’t slip through the cracks so you won’t lose that cash.
- Accounts will be reconciled regularly to catch unrecorded payments and receipts.
- The business bills will get paid on time.
- You’ll be ready for tax time without a stressful, last-minute crunch.
- You’ll have access to a professional perspective on your business finances.
- Your company will save money by avoiding lates fees and catching errors quickly.
- You’ll be free to focus fully on your business and take more time for yourself outside of working hours.
Your bookkeeper will keep things organized and current. They’ll collaborate to help your business thrive. And let you get back to doing the parts of your business you love… the whole reason you started it in the first place. Plus, when you want to see how the business is doing, you’ll be able to pull reports from your accounting software and know that they’re accurate.
All of these factors together give you valuable planning and budgeting information that will help propel your business forward, improve sustainable profitability, and let you sleep at night.
Bookkeepers vs Accountants vs Tax Preparers
What’s the difference between bookkeepers and accountants?
Bookkeepers record and process daily transactions and may handle things like invoicing customers and paying vendors.
Accountants analyze that financial information to give you deeper insights and strategies to boost your bottom line and improve cash flow.
Tax preparers do just that. They prepare your taxes to be submitted to the IRS by filling out all the forms based on the information you provide.
Some people offer one or two of these services, some offer all three. Make sure you know who you’re hiring for which job.
Year-End Cleanups Can Cost You in More Ways than One
All year long you probably meant to get a handle on the business bookkeeping but never had time to get it done. Then at year-end, you’re suddenly stuck facing a mountain of transactions to deal with, and you’re not quite sure if you’re processing them correctly.
Your tax preparer needs the numbers to file your tax return, so you feel the pressure to get it done. So you reach out to some accountants to see how much a year-end cleanup will cost you. The fee surprises you, and it’s not in a good way. These end-of-year jobs typically start at $1,500 – $3,000. And depending on how behind the books are and the transaction volume, that bill could end up costing even more.
As if that wasn’t expensive enough, paying an accountant to do your year-end cleanup is not the only cost here. By not keeping your books up-to-date and correct all year long, you may have:
- Not invoiced every customer for all the products or services your business provided.
- Not realized there were unpaid customer invoices and now feel like it’s too late to remind them.
- Not had a sense of your eventual tax bill so you could make reasonable estimated tax payments.
- Not realized a bank or credit card statement had mistakes on it.
- Overdrawn bank accounts or gone over the limits on credit cards.
- Not known how your business was doing.
Issues like these can affect your company’s cash flow and profitability, even to the point of putting you out of business. When you keep your books up-to-date and correct, you can catch these problems and solve them as they come up… or avoid them all together.
How to Choose the Right Bookkeeper for Your Business
When you hire a bookkeeper, you’re investing in the future of your business. You’re trusting them with your company and its money, so it’s important to hire someone you trust and feel completely comfortable with.
You want to work with someone who responds when you have questions. Who keeps your books current and correct. Who comes to you as soon as they see an issue. Who partners with you to make your business the biggest success it can be.
That’s why it’s important to talk with a few different people before you make a decision. This will be a long-term collaborative relationship, so you want to work with someone you really click with. And who will stick with you and work with you even during tough times.
Of course cost is important. But going with the cheapest option isn’t always the best choice. In fact, it can end up costing you more over the long haul in money, time, and frustration. It may cost a little more but hiring someone experienced, trustworthy, and communicative is worth the difference.
Do You Need Help with Your Bookkeeping?
As you can see, having a reliable bookkeeper helps keep your business on track and can help you be more profitable.
If you’re trying to do your own bookkeeping but constantly falling behind, now is the time to hire a professional bookkeeper. That way you can get your books sorted out correctly before you submit your taxes, which can potentially save you a lot of money and trouble with the IRS.
And once your bookkeeper ensures your systems are set up properly and running smoothly, they can make sure everything is kept up-to-date going forward.
I am opening up 3 spaces in my bookkeeping roster for the coming year.
I expect these to go fast because we’ve been getting a lot of inquiries.
If you’re interested in one of these spaces, please click on the button below to fill out my contact form. From there, we’ll schedule a free 30-minute consultation to see if we’re a good fit.