Creating a business takes time and effort, but as it grows successfully, you need to be able to prioritize your time to focus on opportunities to expand. That doesn’t mean spending hours every week trying to stay on top of your bookkeeping. Yet, so many small business owners are doing that every single month. Before you drown in receipts, bills, and bank statements, you should consider hiring a bookkeeper, which can give you the ability to shift your focus away from organizing your financials to building up your product line or expanding your market share. Before you hire, however, there are a few points to keep in mind for small business monthly bookkeeping.
What Does a Bookkeeper Do?
A bookkeeper assists in keeping your finances in order by managing your general accounting ledgers, recording journal entries, and generating your financial statements. They can also assist in paying invoices, assisting with payroll, and making quarterly tax payments. Depending on what your business needs, you can find the bookkeeper with the right expertise for your industry.
Why is Bookkeeping Important for My Business?
In the broadest sense, your bookkeeper keeps your finances intact by tracking your different accounts, transactions, and financial reports. With their organizational efforts, your financial records are kept up to date, including cash flow statements, bank reconciliations, and loss statements.
If you want an accurate financial picture of your business, then you need a small business monthly bookkeeping in place to give you the information necessary to build budgets, identify spending or sales trends, and strategic planning for the future. Additionally, there are a multitude of steps that you can transition to your bookkeeper instead of managing them yourself.
Here are a few typical small business monthly bookkeeping responsibilities:
- Complete data entry and collect transaction details for incoming and outgoing bank accounts.
- Use accounting software, spreadsheets, and other databases.
- Track debits and credits
- Generate financial reports
- Maintain and monitor financial records for accuracy
- Reconcile and report discrepancies
- Produce or pay invoices
- Complete payroll
- File tax returns
For example, you order additional inventory for your shop. Your bookkeeper gets the receipt, enters the transactions into your general ledger, then files the record into your accounting software. Another instance where you can transition tasks to your bookkeeper is when a sale is made. They can generate the invoice, collect the payment, enter the transaction, and document the paid invoice.
The benefits are clear:
- Free up time in your schedule for expanding your market share and polishing workflows
- Minimizes room for error and increased accuracy
- Solid bookkeeping records in case of an audit
- Accurate financial records for potential financing
Every business is different, so finding the right bookkeeper is a critical financial tool to manage your business and make it easier to reach your goals.
Can I Outsource My Bookkeeping?
For small business monthly bookkeeping, there are plenty of benefits to outsourcing your bookkeeping. One, you pay for only what your business needs. You don’t have the added costs of an in-house professional who is on the payroll, even when your business isn’t that busy. Freelance bookkeepers also bring a variety of skills and knowledge, which can help your business stay up-to-date on the latest changes in the accounting industry. Another benefit is that a freelance bookkeeper can provide competitive pricing, which makes it an affordable option as your business continues to expand. If you are ready to add a bookkeeper to your business, outsourcing might be the right option.
Freelance Bookkeeping VS Bookkeeping Company
A freelance bookkeeper provides options that fit the needs of your business, allowing you to have your bookkeeper working on specific tasks throughout the month for an agreed-upon price. However, freelance bookkeepers might be limited in what they can take on as your business expands, which means you have to transition to a new bookkeeper in the future.
Bookkeeping companies often provide multiple options, allowing you to build a long-term relationship with their team. Additionally, bookkeeping companies can have experts in a variety of industries, making sure you have someone who understands your business. Another benefit of bookkeeping companies is they often have financial experts that you can tap into for long-term financial planning and strategy.
What Are the Pros and Cons of Hiring Freelance Bookkeepers?
If you are considering hiring a freelance bookkeeper, here are a few of the pros and cons.
Pros
They can provide many of the services you find with a bookkeeping service. You can also create a payment plan that fits your budget. No costs for recruiting, hiring, and onboarding a new employee, which means you can get a freelance bookkeeper working right away. They also work virtually, meaning they can access your accounting software and keep it up to date without your business having to pay for additional office space.
Cons
Hiring an outside bookkeeper might lead to a greater risk of exposing your data. Although your bookkeeper will do their best to maintain a high level of security, they also have access to your sensitive data, including bank accounts and passwords to online accounts.
Additionally, their mistakes become your company’s mistakes since you are accountable for any errors. If they are non-compliant, then it can impact your business.
Finally, you might find that there are hidden costs beyond their hourly rate. If you are not clear about your expectations and you ask for additional work, then asking for more tasks to be completed could result in a higher bill than you anticipated.
Cost
Between $18 to $23 per hour, depending on location and expertise
What Are the Pros and Cons of Using A Bookkeeping Company?
A bookkeeping company brings a variety of options, along with its own set of pros and cons.
Pros
Increased flexibility by freeing up your staff to focus on growing your business, allowing you to pivot your team quicker when challenges arise. There is also a greater quality of service since their goal is to make your business run smoother. They can provide a team-based approach and peer-review process that leads to enhanced accuracy and timeliness of deliverables. You have access to superior technology, experienced guidance, and electronic bookkeeping options, all of which can take steps out of your process while maintaining a greater level of accuracy and compliance.
Cons
One of the biggest challenges for most businesses is the loss of control when you outsource any task. Finding a virtual bookkeeping service that you can trust and make sure you still are aware of how your company is performing financially. After all, it is your responsibility as the owner to be aware of the financial health of your business. If your business requires a significant amount of personal knowledge and in-house coordination, then you might want to consider an in-house bookkeeping option or outsource only certain aspects you feel confident can be handled remotely.
Along with the benefits of electronic software, your accounting service might have proprietary software that might have implications if you decide to change services in the future.
Cost
The costs vary depending on the bookkeeping service and whether it have a monthly or tiered pricing system.
Recommendations
Bookkeeping services provide a number of benefits, including the ability to tap into expertise across a wide range of industries. With that in mind, here are a few of the top bookkeeping and accounting services available today.
- Pilot – provides bookkeeping, tax, and CFO services for startups, giving you plenty of options as your business grows.
- AccountsBalance – focuses on e-commerce, startups, and small businesses, while providing another level of convenience by easily integrating with your favorite accounting software.
- Bookkeeper.com – works with companies of all sizes, providing online, remote, and virtual accounting and bookkeeping services, along with tax preparation and planning.
- Bench – serving small businesses while providing professional bookkeeping and tax filing services, as well as a simple platform that is easy to use.
- QuickBooks Live – provides virtual bookkeeping services along with an assigned bookkeeper for your business, who maintains your financials and connects with you via video chat.
The beauty of each bookkeeping service is the expertise they provide, along with options that can be customized to fit the needs of your business and budget.
AccountsBalance is a monthly bookkeeping service specialized for agencies & SAAS companies.
We take monthly bookkeeping off your plate and deliver your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
In Summary
When it comes time to grow your business, you need to outsource to experts so you can prioritize your team, sales, and expand your product line. Regardless of whether you opt for a freelance bookkeeper or a bookkeeping service, your business will benefit from tapping into the financial expertise of a professional small business monthly bookkeeper.
