Your business is growing, and new opportunities are around the corner, but you are struggling to determine whether you can move forward with them. Why? Most often, business owners are wearing multiple hats, and while an opportunity might bring greater sales and potential profits, the truth is they don’t have enough time in the day to take on the additional work and responsibilities.
How can you change that for your business? It starts by delegating specific tasks, such as your bookkeeping, to a professional. But what are your options, and how can you successfully meet the challenge of hiring a bookkeeper for all the life stages of your small business?
Let’s start by diving into the various options available for hiring a bookkeeper for your small business and what each of them offers.
What Does a Bookkeeper Do for a Small Business?
A bookkeeper provides the kind of financial stability your small business bookkeeping requires. They handle critical financial functions, which makes all the difference for a seamless operation.
They keep your books organized and compliant with all the norms related to small businesses.
Here’s a breakdown of what they do:
- Organizing Transactions: The bookkeeper keeps accurate and updated records of all the financial transactions.
- Managing Payments and Invoices: They manage accounts payable and receivable, ensure that bills are paid on time, and collect invoices promptly.
- Reconciling Accounts: Bank statements are reconciled periodically, so there are no discrepancies in your financial books.
- Preparation of Financial Statement: From balance sheets to income statements, bookkeepers provide the key financial reports you need to understand your business’s growth.
- Tax Readiness: Keeping financial records organized allows bookkeepers to make tax season less stressful and more efficient.
In short, bookkeepers for small businesses will manage your finances so you can focus on growth and strategy.
Benefits of Hiring a Bookkeeper for Small Businesses
As a small business owner, you need to take care of many things, and handling a book can drain the focus and energy of a mind.
Hiring a bookkeeper with professional insight would be significantly beneficial for you.
- Saves Time: Delegating tasks like invoicing, recording transactions, and tax preparation allows you to focus on growing your business.
- Guaranteed Financial Accuracy: Bookkeepers reduce errors in your financial records, helping you avoid costly mistakes.
- Compliance and Organization: A professional keeps your books in order and ensures you know tax regulations.
- Strategic Insights: Regular financial reports allow you to analyze performance and see areas of opportunity for improvement.
- Stress Reduction: Knowing your finances are in expert hands reduces worries.
Whether in-house or outsourced bookkeeping services, the right bookkeeper for small businesses will help streamline your finances and do their part for your success.
Signs Your Small Business Needs a Bookkeeper
Your small business demands much of your time and resources as it grows.
Recognizing when to hire bookkeeping help for small business tasks is crucial for managing finances and avoiding costly mistakes.
Here are key signs that it might be time to hire a bookkeeper:
- Overwhelming Workload: You spend more time managing finances than focusing on your core business.
- Missed Deadlines: Late invoicing, payroll slippage, or tax filing errors, all these are now common.
- Rapid Business Growth: More transactions and complexity make managing books difficult.
- Disorganized Books: You need professional support if your financials are incomplete or messy.
- Chaotic Tax Filing: Struggling during tax season clearly indicates you need ongoing help.
Recognizing these signs and hiring a bookkeeper at the right time ensures you are in a better place and have the financial clarity to make better decisions.
What Are the Types of Bookkeeping Services for a Small Business?
In this section, we will explore the various types of bookkeeping services available to small business owners, helping you identify the best fit for your needs.
1. Bookkeeping Service
Bookkeeping services provide a number of options for small businesses. Not only can they handle the daily bookkeeping tasks of recording and categorizing your financial transactions, they can also assist with bill pay, payroll, and creating financial statements. Some bookkeeping services also offer accounting options, meaning that you have access to an accountant for tax advice and financial planning. Most bookkeeping services provide a wide variety of options at different price points, making it easy for you to effectively grow your business while maintaining a relationship with your bookkeeper.
Additionally, bookkeeping services can specialize in different business models, allowing you to gain access to expertise that fits the needs of your business, whether you are a startup, small business, e-commerce, or growing your business through investments or mergers. A bookkeeping service can also be budget-friendly since most of them offer price plans based on the services you choose, your sales, or the number of transactions you have monthly.
2. Freelance Bookkeeper
A freelance bookkeeper can provide many of the services you might find with a bookkeeping service, including recording and categorizing your transactions. You can also work out a payment schedule that fits your budget. Most freelance bookkeepers average between $18 to $23 per hour, depending on their level of expertise, years of experience, and education. Another benefit of a freelance bookkeeper is that you don’t have the costs associated with recruiting, hiring, and training a new member of your staff, plus the ongoing payroll expenses.
Freelance bookkeepers can also work virtually, meaning they can access your accounting software and keep it up to date without having to be in the office. With technology allowing video calls and regular communication through chats and other apps, you can enjoy the benefits of having a bookkeeper without the additional expenses associated with expanding your team.
3. In-House Bookkeeper
An in-house bookkeeper means they are working solely on managing your financials, not any other small business. However, having an in-house bookkeeper also means you are taking on the additional costs associated with expanding your team. While you might have a number of transactions and a large enough payroll to make this worthwhile, it is important to review your bookkeeping needs before committing to an in-house bookkeeper, especially since you will still need to have all your financials reviewed by your accountant during tax season.
If you are ready to hire a bookkeeper for your small business, there are several things you need to keep in mind, regardless of whether that bookkeeper is going to be in-house, freelance, or bookkeeping service. Let’s dive into the 7 steps you should take before you decide to hire a bookkeeper.
Key Qualities to Look For When Hiring a Bookkeeper
Hiring an eligible bookkeeper guarantees the correct level and accuracy of financial management. Finding the right person can make a world of difference!
Therefore, all these qualities should be considered by small business bookkeepers when finding a true asset to their business.
1. Detail-Oriented
Even the slightest error in financial records will lead to costly mistakes.
An attuned bookkeeper will ensure that your transactions are recorded correctly, your reconciliations are accurate, and your financial statements reflect the true state of your business. This will minimize the chances of errors that may appear in the finances and lead to tax problems or wrong decision-making.
2. Industry Related Experience
Having some experience in the industry can allow the bookkeeper to bring valuable insights into the processes of financial bookkeeping tasks.
Whether you own a retail shop, an online business, or a service-based company, you can benefit from a bookkeeper’s counsel that focuses on your company’s needs.
This also means you streamline cash flow for optimal profitability and ensure tax deductions specific to your sector are not missed.
3. Technologically Sound
With the heavy use of software today, your bookkeeper should be highly proficient in tools like QuickBooks, Xero, and other accounting platforms.
This skill enables them to manage financial data effectively, automate processes, and ensure that records are always updated.
A tech-savvy bookkeeper can also set up custom reports that give you real-time insights into your business, making it easier for you to make decisions.
4. Strong Communication
It is not enough to write down the numbers on paper; a bookkeeper should be able to communicate them.
They should be in a position to explain financial reports, trends, and discrepancies to you in simple terms, making it easier for you to understand the business’s financial status.
With good communication, you can address potential issues, thus ensuring that you are in the know and can act when necessary.
5. Problem-Solving Skills
Running a business will bring financial discrepancies or other unforeseen problems. Whether it is an accounts mismatch or cash flow challenge, the ideal bookkeeper will quickly detect problems and devise practical solutions.
Their problem-solving ability ensures your business’s financial processes run smoothly, preventing small issues from building into full-fledged ones.
If you find these key qualities in a bookkeeper, your hiring will become a boon for your business. They’ll manage your day-to-day finances and contribute to your business’s growth and long-term success.
7 Steps to Hire the Right Bookkeeper For Your Small Business
Hiring the right bookkeeper is essential to ensure your small business finances are in good hands. Here are seven steps to guide you in selecting the perfect fit for your business:
Step 1: Get your financials together
Before you hire your bookkeeper, you should have all your transactions together, along with how you want to account for them, either the cash-based or accrual method. You should also have a basic idea of how you want to categorize your expenses, so your bookkeeper can set it up in your accounting software. The goal is to know what you want them to handle and to make sure you have all the information available. Outlining your expenses can also give your bookkeeper an idea of what to expect each month in terms of the number of transactions. It is important that you are familiar with what a bookkeeper does, so you can know what they can handle or not.
Step 2: Depict your perfect virtual bookkeeper (know what you want!)
Part of deciding on hiring the perfect bookkeeper for a small business is knowing what you need them to handle for your business. Be clear about what you expect on a daily, weekly, and monthly basis. While it can be easy to find a bookkeeper for where your business is right now, you also want to know if your bookkeeper will be able to handle additional tasks in the future. Be very clear about your expectations, so you can choose the right fit for your business.
Step 3: Decide which type of bookkeeper you want (listed above)
Now that you know what you want in your perfect virtual bookkeeper, compare that to the different types of bookkeepers available. For instance, a freelance bookkeeper might work for your business right now, but they might not be able to grow with your business as you need them to take on more tasks, such as payroll or bill pay. Once you are clear about what you need your bookkeeper to accomplish, it is easier to find the right fit.
Step 4: Meet and get pricing from multiple options
Talk with different bookkeepers and bookkeeping services to get pricing. Be sure that you are clear about what you need them to do, so you can get an accurate comparison of costs. Will they bill by the number of transactions, your annual sales, or on the number of tasks assigned? With several quotes, you get a clear idea of how much you can afford to have completed by your bookkeeper and what you may need to handle in-house.
Step 5: Evaluate your top options
Evaluate the options that closely fit your perfect virtual bookkeeper. Do they offer options for future growth? Does their pricing fit your budget? Will they be able to meet your deadlines? By comparing your options, you get a clearer idea of which one is the right fit for your business.
Step 6: Go with your “most perfect” option
Once you determine which is the closest to your perfect fit, then you want to sit down and get all your terms in a written contract, being clear about your expectations and the pricing.
Step 7: Evaluate every year to make sure you’re happy
Every year, you want to sit down with your bookkeeper and determine if the relationship is still a good fit for you both. It is also the time to address any changes in the workload or pricing. If you find that your bookkeeper is no longer the right fit for your business, then you should start searching for another option right away.
Finding the right bookkeeper or bookkeeping service for your small business is critical to your long-term growth. By shifting these tasks to someone with the right knowledge and experience, you can turn your focus toward finding growth opportunities to take your small business to the next level.
How Much Does a Bookkeeper Cost for a Small Business?
The amount a small business has to incur to spend on a bookkeeper is driven by the service package required and the kind of bookkeeper appointed.
For professional, efficient, and reliable support for your small business, AccountsBalance offers customized solutions.
Our monthly bookkeeping services start at $299 per month, and they include a dedicated online bookkeeper who seamlessly integrates all your payment processors (like Strip and PayPal), bank accounts, and credit cards into QuickBooks Online or Xero.
With this amount, you’ll receive detailed financial reports, including Profit and Loss Statement, Balance Sheet, and Cash Flow Statement.
We know and ensure your bookkeeping is cost-effective and handled by experts dedicated to simplifying your financial management and supporting your success.
Get your business financials in order!
Final Tips on Hiring the Right Bookkeeper
Choosing the right bookkeeper can greatly impact your business’s financial health, so it’s important to consider these final tips:
Tip #1: Determine your budget and expectations before hiring your bookkeeper.
Tip #2: Find a bookkeeper with the skills and experience to grow with your small business.
Tip #3: Working with a bookkeeping service can give you access to bookkeepers who specialize in your industry.
Tip #4: Consider hiring a bookkeeper for your small business from within. You might have the right person in-house.
Tip #5: Maintain relationships with local colleges and universities since a new graduate might provide bookkeeping services and be aware of the latest accounting methods.
What Is AccountsBalance?
AccountsBalance is a bookkeeping service that specializes in working with online and small businesses. We provide the right options to fit your needs right now but also tools and experienced advice for your business as it grows. Our team will provide your monthly financial statements, review transactions, handle payroll, and much more.
If you are ready to shift your focus away from bookkeeping tasks and onto growing your business, then our team can help!
Frequently Asked Questions (FAQs)
Here are some commonly asked questions while hiring a bookkeeper for small businesses.
How Does Outsourced Bookkeeping Work?
Outsourcing bookkeeping services for small businesses involves hiring professionals or firms outside to do your financial tasks. Here’s how it works:
- Initial Assessment: The professionals will review your business’s financial structure to understand your needs.
- Software Integration: They set up or access your accounting software to manage your books remotely.
- Regular Updates: The outsourced team will handle day-to-day activities such as transaction recording, reconciliations, and financial reporting.
- Monthly Check-ins: You’ll receive detailed financial statements and updates to keep you informed.
- Scalability: As your business expands, the services can be extended to include payroll, tax preparation, and more.
Outsourcing saves costs while providing expertise and scalability, making it an excellent option for many small businesses.
What Questions Should I Ask in a Bookkeeping Interview?
Choosing the right bookkeeper begins by asking the right questions. Here’s a concise guide to help you evaluate their fit to your small business:
- “What experience do you have with small business bookkeeping?”
This will ensure they understand the unique challenges small businesses face.
- “Which accounting tools are you proficient in?”
Confirm if they can work with platforms like QuickBooks or Xero.
- “How do you handle discrepancies in financial records?”
Reveals their ability to maintain accuracy and resolve issues.
- “Can you provide client references?”
Offers insights into their reliability and track record.
- “How do you ensure data confidentiality?”
Confirms they prioritize safeguarding your financial information.
These targeted questions clearly understand the bookkeeper’s expertise and compatibility with your business.
What Are the Typical Qualifications for a Bookkeeper?
A professional bookkeeper typically should possess the following:
- A degree or certification in accounting, finance, or a related field.
- Credentials like Certified Bookkeeper (CB) or QuickBooks ProAdvisor certification are valuable.
- Familiarity with bookkeeping for small businesses, including managing transactions and preparing financial reports.
- Proficiency in working with several software.
- Knowledge of tax laws and compliance requirements.
With such qualifications, a bookkeeper has all the expertise and experience to handle your financial records.
Conclusion
Hiring the right bookkeeper for your small business involves knowing what tasks you want your bookkeeper to perform, your budget, and the needs of your business. Recognize that your business is best served when you can delegate tasks, including bookkeeping, to a qualified professional, whether that is an in-house bookkeeper, a freelance bookkeeper, or a bookkeeping service that specializes in working with businesses just like yours!
