Bookkeeping services can be costly, but they’re well worth the expense if your business has reached the point where it needs one. But how do you know when that point has been reached? Here are some tips to help you figure out whether you need bookkeeping services, and what to look for when hiring them.
Know Your Options
When it comes to bookkeeping services, you have a few different options: You can hire a full-time employee, use an outside company that handles it all for you, or outsources tasks to your in-house bookkeeper. Outsourcing your bookkeeping tasks will be less expensive than hiring someone on site, but using an outside accounting firm isn’t necessarily more expensive than hiring a part-time bookkeeper. It depends on your needs and how much time and effort you’re willing to devote to getting what you need from an outside source. The biggest factor will be choosing between hiring part-time help or outsourcing tasks like tax prep and payroll preparation. Before making any decisions, make sure you know exactly what each option entails.
A good rule of thumb is to never spend more than 10% of your revenue on bookkeeping services. If you’re spending significantly more than that amount—or if you don’t even know where your money is going—it’s probably time to consider finding an outside accountant or outsourcing some of those duties.
Understand The Costs
The primary benefit of a full-service bookkeeper is that you don’t have to hire and train another employee. But these benefits often come at a price. For example, some business owners report spending $2,000 or more on bookkeeping services each month. A professional service can also be a great investment if you’re new to the business and need an expert eye to help with financial management from day one. However, if your company isn’t growing rapidly or if you feel like your existing bookkeeping software is doing most of what you need, it might make sense to handle finances internally instead of hiring another employee.
Consider Outsourcing Early On
With so many new small businesses scaling their operations in a hurry, it’s essential to ensure you consider bookkeeping services before the launch. A little out-of-the-box thinking on your part can help you find a cost-effective way to manage your books without adding significant new costs. You should also factor in that they’ll not only help you get organized but also provide an extra set of eyes on how your business is performing. Keeping as many of these daily tasks at arm’s length can provide an essential boost in operating efficiency and focus as well.
Hire Slowly And Fire Quickly
One of your biggest hires as a business owner is someone to handle your accounting. Yes, it can be difficult to let go of an employee you’ve worked with for years. But that’s exactly why hiring slowly is important; you want to give people a chance to prove themselves. Otherwise, if you hire someone who isn’t working out, then it may take too long (or be too difficult) to get rid of them. And that wastes everyone’s time and causes more stress than necessary. If you have employees already, think about other small businesses in your community that could use some extra help – they might know someone who would fit well in your office!
Keep Good Records Yourself
The best bookkeeper in town is not a substitute for great record-keeping. Keep track of your income and expenses by hand—at least at first—so you can reconcile your accounts with whatever they’re doing on their end. If you use QuickBooks, Quicken, or some other software to keep track of your income and expenses, make sure you save data electronically in case something happens to your books. Most programs allow you to back up files locally or remotely (you might even find that it’s built into most solutions). You also should regularly print out detailed reports so you can see where the money comes from and goes every month. It might be frustrating at first to have to do things by hand, but eventually, it will become second nature.
Get Out Of Your Way
There are many reasons why bookkeepers might not work with small businesses. Owners need to be confident that they can give you their full attention and focus, that you’ll have prompt access to them in person or by phone, and that you won’t be handed off to an assistant. Also, some business owners aren’t sure whether or not they should outsource their bookkeeping; a good bookkeeper will help resolve your concerns. When deciding whether or not you need outside help with bookkeeping services, look at it as an investment.
