When Should You Hire a Bookkeeper? A Small Business Owner’s Guide to Timing and Growth
Small business owners often have several roles. You could be handling sales, customer support marketing operations, hiring, and business development while attempting to keep your accounting in order. Bookkeeping is frequently something that a business owner does himself.
Initially, this may appear feasible, but over time it can become a time-consuming task to keep records of transactions, expenses, reconciliations, invoices and reports. Then, about when is it a good idea to hire a bookkeeper?
The point at which you should move from one revenue figure or business size to the next varies from one business owner to the next, but normally is dependent upon the length of time bookkeeping will take, how complex the business has got or whether you have had access to accurate financial information to make decisions about the running of the business.
Why Does Small Business Bookkeeping Matter?
Bookkeeping is more than recording income and expenses. Accurate financial records help you understand how your business is performing and where your money is going.
Good bookkeeping can help you:
Monitor cash flow
Track business expenses
Understand profitability
Prepare for tax season
Review accounts receivable and accounts payable
Make informed financial decisions
Determine whether your business is ready to grow
Without accurate books, it can be difficult to answer important questions such as: Are you actually making a profit? Can you afford to hire another employee? Are expenses increasing too quickly? Do you have enough cash available to support expansion?
Professional bookkeeping gives business owners reliable financial information without requiring them to manage every financial transaction themselves.
7 Signs It’s Time to Hire a Bookkeeper
1. Your Books Are Always Behind
Getting behind with your finances is one of the obvious reasons that bookkeeping services may be the right choice for you. Your accounting work is always late and catching up never really gets done because there are other more pressing things going on.
If your cash transactions are not only unreconciled but are also months overdue, invoicing has not been properly handled, and you repeatedly tell yourself "I'll do it later", then professional bookkeeping support may be the way to go.
Taking too long to do the books can be confusing for you to figure out the state of your financial affairs at any given time.
2. You Are Spending Too Much Time on Bookkeeping
Your time as a business owner has great worth.
If spending your evenings or weekends inputting entries, sorting receipts, reconciling accounts, and making reports instead of working on clients and increasing your business has become a pattern, then outsourcing your bookkeeping can be a wise use of your resources.
Even though you hire a bookkeeper, it won't mean losing control. Getting accurate financial data with time spent on operating the business will be the result.
3. You Are Not Sure How Profitable Your Business Really Is
Your business may not be financially healthy just because your top line is strong.
Accurate bookkeeping can give you the answers if you continuously doubt about what kind of money you are spending or whether certain goods, works or tasks are making you profits.
You can identify financial trends and decisions with the help of the periodic financial statements like profit and loss statement, balance sheet, cash flow statement, accounts receivable, accounts payable, and expense statement.
4. Your Business Is Growing Quickly
Growth is exhilarating, but it also tends to complicate bookkeeping.
An increased number of customers naturally result in more transactions, while an increased number of staff means more responsibilities related to payroll. Opening a new office, developing new services, or getting new suppliers or business accounts will all generate increased financial activity.
If your business is growing at a pace that your bookkeeping system cannot handle, hiring a bookkeeper may help to organize your financial affairs better before minor issues turn into bigger complications.
5. You Are Mixing Personal and Business Expenses
Bundling your money for different purposes could result in a tangled mess which will eventually cost you more effort to sort out than if they were done one at a time.
If you have the same checking accounts or credit cards for both the business side as well as the private side, it is very likely that it is time for you to improve your business accounting procedures.
Expert bookkeeping will not only be a great help in handling your expenses well but also provide you with a more accurate and cleaner way of keeping track of your business finances.
6. Tax Season Is Always Stressful
If your tax time is a scramble looking for your receipts, statements, expenses, and financial data that went missing, it indicates that you may have some issues about how you do your bookkeeping.
Keeping your accounts well-maintained will help you avoid running into problems when it is time for filing your taxes and making financial reports.
You will be able to detect and deal with problems as soon as they arise if instead of waiting until tax season is upon us you are bookkeeping your business on an ongoing basis.
7. You Are Making Decisions Without Reliable Numbers
Making business decisions based solely on intuition is not the way to go.
Whatever it is that you have planned from employing a new staff member to expanding your services, spending money on something new, investing in growth or even buying new equipment, you can always rely on accurate financial data to determine what your business can support.
When the data shown by your accounting system cannot be relied on, hiring an expert bookkeeper can probably become the vital move.
Should You Hire an In-House Bookkeeper or Outsource?
Once you decide you need help, another question comes up: Should you hire an in-house bookkeeper or use outsourced bookkeeping services?
An in-house bookkeeper can provide dedicated support, but employing someone comes with additional costs such as salary, benefits, equipment, training, and other employment-related expenses.
For many small businesses, outsourcing can provide access to professional bookkeeping expertise without the commitment of adding a full-time employee.
The right choice depends on your business size, transaction volume, reporting requirements, software, industry, and ongoing needs.
What Should You Look for in a Bookkeeper?
Choosing the first available bookkeeper may not always be the best approach. Look for someone who understands small business finances and is familiar with your accounting software, industry, and specific bookkeeping requirements.
Important factors include:
Experience with small businesses
Knowledge of accounting software such as QuickBooks
Accurate and timely financial reporting
Clear communication
Proper transaction categorization and account reconciliation
Relevant qualifications and experience
Understanding of your industry's financial challenges
If your books are already disorganized, you may also need catch-up bookkeeping or QuickBooks setup before moving into ongoing bookkeeping services.
Find the Right Bookkeeping Support for Your Business
Knowing when to hire a bookkeeper is ultimately about recognizing when bookkeeping is taking too much of your time or preventing you from having a clear understanding of your business finances.
The Bookkeepers Marketplace from McCoy Capital Partners is designed to connect growing businesses with CPA-vetted bookkeeping professionals. Each bookkeeper passes a CPA-vetted skills assessment, and businesses are matched according to factors such as industry, software, business size, and specific needs.
The process is designed to be simple: tell the marketplace what your business needs, receive curated matches, interview your options, and choose the bookkeeper who fits your business. The relationship is then directly between you and your selected bookkeeper, with a one-time matching fee rather than an ongoing marketplace subscription.
If your books are falling behind, your business is growing, or you simply want more confidence in your financial numbers, it may be time to hire a bookkeeper.
Better bookkeeping means better financial visibility—and better financial visibility can give you the confidence to focus on what matters most: growing your business.
Comments