MILO Business Consulting

Do I need a bookkeeper for my business?

As a small business owner, you wear many hats. You are the accountant, the marketing director and perhaps even one of the janitors. With such an overwhelming workload and so many responsibilities, do you really have time to manage your own books?

Yes.

The truth is that bookkeeping should not be viewed as a chore but instead as an investment in your business’ future success.
One common excuse for not hiring a bookkeeper is that the cost is too high. Many business owners complain that the prices they are quoted are more than they could possibly afford.
The reality is that you can hire a bookkeeper for $25-$50 per hour depending on their level of expertise, their geographic location and of course, your negotiation skills. You may also be able to negotiate a monthly retainer or even an installment billing plan.
What is important is to learn how to negotiate and figure out what you are willing to pay for your bookkeeper. There are many things that you can do as a small business owner to make sure that your bookkeeper is indeed the right fit for your busy business.

Here are some questions that you should ask when determining if hiring a bookkeeper is really the best idea for your company:

  1. Are their credentials and experience with running a business?
    If you are only considering their experience in small business, then this may be misleading. There are many people who are very successful bookkeepers for individuals but once they move into a business environment, run into problems.
  2. Do they have a certification in QuickBooks?
    This is the number one program that bookkeeping professionals use to process your business’ data. The QuickBooks ProAdvisor designation shows that your bookkeeper has at least 3 years of experience using the software, is proficient in setting up reports and can customize transactions if needed.
  3. Are they willing to work with your accounting system?
    There are many companies that use QuickBooks as their accounting software. You will also want to learn if your bookkeeper is willing to work with another accounting system and or have the ability to produce reports in other formats.
  4. Can they communicate clearly with you?
    You cannot have a business management team that cannot speak the same language and this does not mean only English. Would you be comfortable for your bookkeeper to speak with you in other languages?
  5. Can they communicate with your employees?
    After all, if you have one person in charge of overseeing the books and reporting up through you, then there is a need to communicate effectively with your employees. What happens if they cannot write or speak on behalf of your company?
  6. Finally, what is your communication style?
    You want to surround yourself with people who share your business style and are comfortable talking to you directly.

Why do I need a bookkeeper for my business?

  1. Save Money:
    Bookkeeping can help you save money at tax time. For example, you might find that you could get a tax deduction for items that would not normally be deductible. Or if you use QuickBooks, then you can have your bookkeeper input all of your business transactions so that your accountant can include the deductions and credits in their reports.
  2. Set up a corporate structure:
    The easiest way to have all of your business transactions available for an audit is to have all of the books in one place, so that you can easily see all of the transactions for each month. The other reason to create a corporate structure is that you can save money on taxes by filing as a corporation instead of as an individual.
  3. Set up your business’ financial statement:
    Once you have made the decision to hire a bookkeeper, then it is time to set up your company’s financial statements. If you have been using QuickBooks to manage your books, then creating your financial statements should be fairly easy. If you have not been using a program, then don’t worry, your bookkeeper should be able to guide you through the process.
  4. Keep track of your inventory:
    Many small businesses do not keep track of their inventory because they think that it is too complicated. The truth is that it just takes a little bit of time and effort in order to track your inventory. Inventory is an important element because it shows that you have a physical asset in your business.
  5. Help you understand where your money is going:
    A bookkeeper can help you to see where the money is coming from and where the money is going. It may seem like a waste of time if you are using QuickBooks, but if there is something that the program cannot track, then it could be very useful to have someone else handle everything for you.
  6. Save you time:
    A bookkeeper will take the tedious task of recording sales, and inputting all of the transactions into QuickBooks. This means that you will have more time for other important tasks. For example, you can give more attention to marketing and advertising or finding new clients.
    Additionally, your bookkeeper can provide reports in multiple formats and with a variety of filters so that you can understand where your business is headed.
  7. Save you money:
    Your bookkeeper can help you to save money on your books. For example, did you know that if you pay someone a $50 CPA fee for each tax return, that it could add up to hundreds of dollars? Bookkeeping is more than just filling in numbers from QuickBooks and in many cases, a bookkeeper should be able to go and talk with your accountant if need be.
  8. Reduce errors:
    Small business owners make a lot of mistakes in their books. These mistakes could lead to having to re-do a year’s worth of work. A bookkeeper should be able to prevent this from happening.
  9. Reduce liability:
    If you have a bookkeeper, then you will have an extra set of eyes on the books. This means that if the business does not do what it is supposed to do or makes an error, then the bookkeeper will catch it and be able to serve as a witness if you are sued.
  10. Eliminate duplicate payments:
    Many business owners make the mistake of going to their bank and paying themselves the same money twice. This is called double dipping and even though it may seem like a small thing, it can add up. There are times when you receive an extra payment, but in order to receive extra money you have to apply it to the previous month. If you are the only one who receives an extra payment, then it is easy to lose track of this money. Your bookkeeper should be able to tell you if this is happening and help to prevent it from happening in the future.

Conclusion
At this point, you should have a pretty good idea about what your bookkeeper does. The best thing to do at this point is to find someone that you can work well with and learn about the details of bookkeeping. As you get to know the details of bookkeeping and how the process works, you will become more comfortable with filling out all of your financial transactions.

Leave a Comment

Your email address will not be published. Required fields are marked *