Why Hire a Bookkeeper?

Starting a business you’re passionate about is a rewarding venture, but not every aspect of running a company is appealing. Hiring a bookkeeper ensures you have a professional managing your finances. This frees you up to run the daily business yourself. Below, we’ll answer the question, “Why should I have a bookkeeper?

A bookkeeper manages the financial side of the business, freeing you up to work on other tasks. Your business’s bookkeeper records all financial transactions so there are no mistakes or surprises come tax time. They work behind the scenes to keep your business running smoothly.

What Does a Bookkeeper Do?

A bookkeeper keeps track of all of the finances relating to your business. This means they document things like:

sales
payments
receipts
purchases

They keep files on the daily, monthly, and periodic financials. This type of regular record-keeping helps if you need future financing. It also ensures you’re ready for tax time. You can hand the information that a bookkeeper compiles to your accountant.

When Does Your Business Need a Bookkeeper?

A business just getting off the ground might seem easy to run, but as it grows, you might find that you can’t manage everything yourself. Or maybe you don’t have the mind for math and finances. In both of those cases, you’ll need to hire a bookkeeper.

You need a bookkeeper if your business has so many different parts that you don’t have the time to dedicate to the financial side of things. You don’t want to get behind in invoicing customers, paying employees, and keeping records of bills and receipts. A bookkeeper will do all of this for you.

Benefits of Working With a Bookkeeper?

So, what are the benefits of hiring a bookkeeper? It’s tempting to want to do it all when you’re running a business, but that gets overwhelming. There are many benefits of working with a bookkeeper.

You’ll Save Time

Instead of spending hours each month sorting your business finances, you’ll have someone else to do that. This frees you up to do other work.

You Won’t Miss Unpaid Invoices

When you’re juggling all aspects of your business, it’s understandable that some things will slip through the cracks. However, when those things are unpaid invoices, your business is going to lose money.

Hiring a bookkeeper means there’s someone who keeps an eye on all of the invoices: when they’re sent out, when they’re due, who has paid, who still owes, and more. Most importantly, if someone doesn’t pay, the bookkeeper will send reminders and issue fees until that money comes in.

They’ll Help You Identify Any Cash Flow Issues

A bookkeeper manages your daily finances, so they’ll immediately see if there’s a problem with cash flow. They’ll let you know if you’re spending too much or not making enough profit.

You Can Focus On Growing Your Business

When you have a bookkeeper managing your finances, you don’t have to worry about money at all. You can focus on your business knowing that the bookkeeper is keeping an eye on your income and expenses.

Tax Season Will Be Smoother

A bookkeeper keeps your business finances in order so you don’t have to scramble to get everything ready at tax time. You’ll also have a good idea of your business status so there won’t be any surprises.

You’re Prepared for an Audit

In case your business gets audited, you don’t have to worry about getting your finances together. The bookkeeper’s documents will supply all of the information you need.

It’s Easier to Secure Loans From Banks and Other Creditors

When you’re trying to get loans to support or expand your business, you need financial documents to back up your claims. The bookkeeper will prepare everything you need for these meetings.

You Won’t Miss Any Credits or Deductions

The bookkeeper knows not only the finances for your business but also the tax credits and deductions you can apply for. This means you’ll save money and possibly pay less in taxes than you would without this professional help.

How Are Bookkeepers Different From Accountants?

Bookkeepers and accountants can both help you manage the financial side of your business, but they’re very different jobs.

A bookkeeper prepares the financial information by managing your daily finances. They might use billing and invoicing platforms for your business. They also compile financial statements that you’ll need for taxes, fundraising, bank loans, and more.

Accountants interpret the information that bookkeepers compile. They review your financial reports, help with tax issues, and can help you streamline or change your financial operations.

Bookkeepers don’t need a license for their position, though they can earn certificates in certain areas of expertise. Accountants earn certification from the Association of International Certified Professional Accountants (AICPA). This is just another reason why it is worth it to hire a bookkeeper.

When Should You Hire a Bookkeeper?

You can hire a bookkeeper at any time, but it’s best to do it soon after starting your business. They’ll have a chance to get familiar with your work and business practices and help you stay on top of things. If you’re trying to do it all on your own, you might find yourself getting behind quickly.

Finding the Right Person

It’s important to trust your bookkeepers since they’ll have access to the inner workings of your business. You can find a bookkeeper through local bookkeeping firms. You can also ask professionals you know if they recommend anyone specific.

Hiring a bookkeeper is just like hiring an employee. Whether you find them through a firm or a referral, you want to check their work history and resume. Ask for references to contact. Before you finalize the hire, hold a meeting with your accountant so they can meet and you’ll see if it’s a good partnership.

Is a Fractional Bookkeeper the Solution?

You don’t have to hire a dedicated bookkeeper to keep your business running smoothly. You might prefer to outsource the job by employing a fractional bookkeeper. You’ll only pay when you need them.

Finding a fractional bookkeeper opens your search from local bookkeepers to remote workers as well. You can search for a professional who knows more about your specific industry.

Conclusion

While it’s not hard to learn how to do bookkeeping, hiring the right person for the job will greatly benefit you. Find a bookkeeper who works well with your accountant for a quality business partnership. You can also choose to hire a fractional bookkeeper on a part-time basis. Many options will benefit your business, so make sure you hire a bookkeeper now.