Why Hire a Bookkeeper?

• More time and ability to focus on providing your product or service.

• Getting back personal time for a better work/life balance.

• Getting a different perspective on your business.

• Reducing costs of the important financial items.

• Getting the books correct is a priority.

• Identifying problems within your company.

Hiring a bookkeeper depends on what stage of growth your business has reached and how comfortable you are doing your own bookkeeping. So, when should you hire a bookkeeper?

If your business is new and your bookkeeping is minimal, you may be able to do your own bookkeeping with a simple spreadsheet. But as your business expands and becomes more complex—and profitable—it’s time to consider professional assistance.

When you begin weighing the pros and cons of hiring a bookkeeper, consider the following questions:

• How much time do you spend on bookkeeping each month? And how much time do you have to spare?
• Does the thought alone of bookkeeping add extra stress to your day?
• Are you behind on your bookkeeping, or unsure of your accuracy?
• Do you ever feel unsure whether your financial records or tax filings are correct?

Your answers will give you an indication of how urgently you need to bring on a bookkeeper. Follow your intuition.

What are the benefits of working with a bookkeeper?

If you’re unsure whether you’re ready to hire a bookkeeper, consider these major benefits and how they can positively affect your workdays and business success.

1. You get important info.

Every month, your bookkeeper prepares a balance sheet and a profit and loss statement. These financial statements give you the essential info you need to run your business and file taxes.

When a qualified bookkeeper is on the job, financial statements are prepared properly and according to accounting standards—so your accountant can quickly and easily file your taxes.

2. You gain the potential to pay less in taxes.

When a bookkeeper is experienced with businesses in your industry, they understand common expenses—and can let you know which business expenses are tax deductible.

For instance, a bookkeeper who works with other yoga studios can tell you whether the cost of additional training for one of your instructors can be deducted on your taxes.

Plus, the cost of hiring and working with a bookkeeper is also tax-deductible.

3. You could pay less in accounting fees.

Suppose you went all year without preparing monthly financial statements and then handed off your business records to an accountant to file your taxes. They’d have to go back and prepare financial statements retroactively—effectively, doing a bookkeeper’s work.

Since accountants generally charge more for their time than bookkeepers do, it means you’ll end up paying more. If you have a bookkeeper do the job properly in the first place, you’ll save money in the long run.

Even if you prepare your own monthly financial statements and deliver them to your accountant come tax time, you risk being charged extra if they need to correct any errors. A qualified, professional bookkeeper should be able to deliver flawless books on your behalf.

4. You’ll save time.

When you spend less time on administrative tasks like bookkeeping, you’ll enjoy more time to focus on your clients and business success.

If you’re self-employed, it can be hard to put a price on your time. Use an online calculator to determine how much your time is worth. This can help you better determine whether bookkeeping is worth the hours it takes you to complete on your own.

5. You might even increase your profits.

One survey shows that, on average, companies’ profits increase 16% after they hire bookkeepers. One reason for this is that bookkeepers have the experience to efficiently manage your bookwork, giving you more time to focus on other areas of your business (like increasing profit).

Signs You Need to Hire a Bookkeeper

by Bryce Warnes

If your business is growing, you can only get away with do-it-yourself bookkeeping for so long.

Maybe you have a really great spreadsheet template you found online. Maybe you even shelled out for some accounting software. But as your business expands and your financials get more complex—you’re going to get up one day, look at yourself in the mirror, and say, “I need to hire a bookkeeper.”

While there’s no hard-and-fast rule to when you should bring on hired bookkeeping help, there are some common, telltale signs that entrepreneurs experience just before they reach the tipping point.

If you’re suffering from any of the following symptoms, it’s probably time to hire a bookkeeper.

DIY bookkeeping takes up more time than you can afford

According to a Gallup poll, 39% of small business owners work more than 60 hours a week.

Don’t take your own time for granted. Not only does overworking lead to burnout, but every minute you spend on a task has a dollar equivalent.

First, start tracking how much time you spend per week on bookkeeping. Then, using an online calculator, determine how much your time is worth, and figure out how many “dollars” you spend on bookkeeping per month.

Compare your “salary” as your own bookkeeper against the price of professional bookkeeping. Once you treat the time you spend bookkeeping as an actual expense in cash, you’ll have a better idea of whether you should keep doing it.

Your books are never up to date

When you fall behind on bookkeeping, your books stop reflecting the actual state of your finances. That makes it harder (sometimes impossible) to understand cash flow and accurately gauge the health of your business.

For instance, if your Cost of Goods Sold (COGS) hasn’t been updated in six months, you can’t subtract if from your revenue in order to determine how much profit you’ve earned in that time.

Which means you’re blind to how much money you’re actually making—and the steps you can take to increase your income.

What’s more, if your books aren’t up to date, you’ll have a ton of catch up bookkeeping to do during tax season, making a typically stressful time of year even more difficult.

With a qualified bookkeeping solution, you can expect to receive monthly financial statements, so you’ll know where your money is going to and coming from.