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Keeping accurate financial records is a key part of running any successful business. However, managing these tasks can often feel overwhelming, especially for business owners who are already juggling multiple responsibilities. Why hire a bookkeeper? Well, it can save time, reduce stress, and improve the overall financial health of your business. In this article, we’ll answer the question, Why should I hire a bookkeeper? and explain how TGG Accounting can provide the support you need during the process.
What Does a Bookkeeper Do?
As one of the key accounting team roles, a bookkeeper handles the day-to-day financial transactions of a business. They record sales, purchases, receipts, and payments, ensuring all financial data is organized and up to date. Here are some key responsibilities of a bookkeeper:
Maintaining Accurate Records
A bookkeeper will track all financial transactions and ensure that they are recorded correctly. This includes keeping tabs on cash flow, expenses, and income, as well as ensuring that all documentation is filed properly. Having accurate records is essential for making informed business decisions.
Managing Invoices and Payments
Bookkeepers handle both incoming and outgoing payments. They ensure that invoices are sent out on time and that your business pays its bills promptly. By keeping track of due dates, bookkeepers help maintain good relationships with suppliers and prevent late fees.
Preparing Financial Statements
Regular financial statements like balance sheets and income statements provide a clear snapshot of your business’s financial health. A bookkeeper prepares these reports so that you can stay informed and make strategic decisions based on real data.
Assisting with Taxes
Although bookkeepers do not typically file taxes, they play a crucial role in preparing the necessary financial information for tax season. This means ensuring that all records are up to date and that you have everything you need to comply with tax laws, reducing the risk of errors or penalties.
Benefits of Hiring a Bookkeeper
If you’ve been wondering, Why do I need to hire a bookkeeper?, we’ve rounded up some of the key advantages to hiring a bookkeeper for your business.
More Time for Core Business Activities
As a business owner, your time is valuable. Why hire a bookkeeper? Managing finances takes time and attention away from other critical tasks like growing your business or improving products and services. By hiring a bookkeeper, you free up time to focus on what really matters, knowing that your financials are in good hands.
Improved Accuracy and Reduced Errors
Financial errors can be costly and time-consuming to fix. A professional bookkeeper has the skills and attention to detail to ensure that your records are accurate and complete. This reduces the likelihood of mistakes that could lead to penalties, missed payments, or financial discrepancies.
Better Cash Flow Management
Cash flow is the lifeblood of any business. A bookkeeper will help you keep track of income and expenses, allowing you to better manage cash flow. This can prevent cash shortages and help ensure you always have the resources to meet your obligations.
Reduced Stress During Tax Season
Tax season can be stressful for any business owner, especially if your financial records aren’t properly organized. Why hire a bookkeeping service? A bookkeeper ensures that your records are accurate and up to date throughout the year, making tax preparation much easier. This also reduces the risk of missing deductions or making costly errors.
Financial Insights for Better Decision-Making
When your financial data is well-organized, you can use it to make informed decisions about your business. Bookkeepers can provide reports and insights that show trends in your business’s performance, helping you make strategic decisions to improve profitability and growth.
When Should You Hire a Bookkeeper?
Now we’ve answered the question, Why should you hire a bookkeeper? Let’s turn our attention to when to hire a bookkeeper.
Many small business owners handle their own bookkeeping, especially in the early stages of their business. However, as your business grows, managing your financial records can become more complicated and time-consuming. Here are a few signs that it may be time to hire a bookkeeper:
- You’re spending too much time on bookkeeping tasks and less on growing your business.
- Your financial records are disorganized or incomplete.
- You’re unsure about your cash flow or financial health.
- Tax season feels overwhelming, and you struggle to get everything in order.
- You want more detailed financial reports to make better business decisions.
If any of these apply to you, hiring a bookkeeper can be a game-changer for your business.
FAQs About Hiring a Bookkeeper
What’s the difference between a bookkeeper and an accountant?
While both bookkeepers and accountants deal with financial data, their roles are distinct. A bookkeeper records day-to-day transactions, ensuring that financial data is organized and accurate. An accountant, on the other hand, analyzes this data and provides higher-level financial advice and tax preparation and ensures compliance with regulations. Bookkeepers handle the foundational work that accountants build upon.
How much does it cost to hire a bookkeeper?
Wondering, how much does a bookkeeper cost? The cost of hiring a bookkeeper can vary depending on the size of your business, the complexity of your financial transactions, and the level of service you need. Some bookkeepers charge hourly rates, while others offer monthly packages. On average, small businesses can expect to pay anywhere from $200 to $2,500 per month for bookkeeping services. For more customized services, it’s best to consult with a professional like TGG for a tailored quote.
Can I hire a part-time bookkeeper, or do I need someone full-time?
Yes, many businesses only require a part-time bookkeeper, especially smaller or newer businesses. Depending on the volume of your transactions, you may only need someone for a few hours a week or month. If your business is growing or has more complex financial needs, you might consider hiring a full-time bookkeeper or outsourcing to a service that can scale with you.
What should I look for when hiring a bookkeeper?
When hiring a bookkeeper, it’s important to look for someone who is detail-oriented, trustworthy, and experienced with businesses similar to yours. Ask about their certifications, experience with accounting software, and their familiarity with your industry. Clear communication is also key, as you’ll want someone who can explain financial information in a way you can easily understand.
How can bookkeeping software help if I hire a bookkeeper?
Bookkeeping software can enhance the efficiency of your bookkeeper’s work. It allows for real-time data entry, automated reports, and easier tracking of expenses and invoices. Popular software like QuickBooks, Xero, or FreshBooks can be integrated with your bookkeeper’s workflow to streamline the process and ensure that your financial records are always up to date. Your bookkeeper can help you choose the best software for your needs.
Do I need a bookkeeper if I’m using accounting software?
While accounting software can simplify financial management, it doesn’t replace the expertise and oversight of a professional bookkeeper. Bookkeepers not only enter and organize data but also ensure that everything is accurate and complies with tax regulations. They also provide valuable insights and handle tasks like reconciling accounts, managing invoices, and preparing financial reports, which software alone can’t do effectively.
How often will I need to meet with my bookkeeper?
The frequency of meetings with your bookkeeper depends on the complexity of your financial needs. Many businesses meet with their bookkeepers on a monthly or quarterly basis to review financial statements and discuss any issues. However, in some cases, more frequent check-ins may be needed, especially if there are urgent financial matters to address. Your bookkeeper will work with you to establish a schedule that fits your business.
Can a bookkeeper help me with budgeting and forecasting?
Yes! While the main role of a bookkeeper is to maintain accurate financial records, many bookkeepers can also assist with creating budgets and financial forecasts. They can analyze your historical financial data to help you predict future income and expenses, making it easier to plan for growth or manage cash flow more effectively.
Is it better to hire an in-house bookkeeper or outsource the work?
This depends on the size and needs of your business. Small businesses often find outsourcing to be more cost-effective, as they may not have enough work to justify a full-time, in-house bookkeeper. Outsourcing also gives you access to a team of financial professionals, offering a broader range of expertise. On the other hand, larger businesses with more complex financial needs might benefit from having an in-house bookkeeper who is available full-time.
What’s the best way to work with a remote bookkeeper?
Working with a remote bookkeeper is becoming increasingly common. Cloud-based accounting software allows bookkeepers to manage your finances from anywhere while keeping you updated in real-time. Communication is key when working remotely. Set clear expectations for reporting and check-ins, and ensure all necessary documents can be shared securely via online platforms.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
