Maybe you are on the fence about whether to hire a bookkeeper, or maybe you’ve yet to give it a moment’s thought. Either way, here are some questions to ask yourself that will help you make the right decision for your business.
Top Questions to Ask When Deciding if You Need a Bookeeper
Is it becoming difficult to track expenditures?
In the early days of a business it can seem realistic to keep track of the finances yourself, but as you expand it can grow increasingly difficult to keep the books in order. Some payments may be coming out of your own pocket, and be forgotten or simply unrecorded. Accurate bookkeeping is essential to ensuring a business runs smoothly. If you feel unorganized – then you probably are, and that will begin to negatively impact your business.
Are we having trouble collecting payments from clients?
Sending out invoices, reminders, and collecting payments all in a timely manner can be difficult without proper organization. Collecting what is owed to you in a timely manner is needed to generate strong cash flow and profits. If you are having trouble managing or collecting your payments then you may need additional help.
Are we spending a lot of time balancing the books?
It’s no secret that small business owners are superstars who can and will do every job themselves, but it’s also obvious that you need to focus on what you do best without getting bogged down with finances and paperwork. Running a business eats up so much of your time and energy that the last thing you need to be expending that energy on is bookkeeping.
Your Bookeeping Options
1. Do it yourself
There’s an app for that! Several actually. Apps such as Quickbooks, Freshbooks, and FreeAgent are all simple, efficient, and perfect for small businesses. They organise everything from invoices to time tracking, contracts to sales, and much more in a way that is easy to understand. With a variety of different plans to match your needs and number of clients you can expect to pay anywhere from $15 to $50 per month.
Outsourcing back office work is another popular option for those hoping to step up their organisational game, and it allows you to work with qualified bookkeepers and accountants. Enkel is one such partner that only requires you to send in your receipts, and from there you will be able to view information such as cash flow statements, balance sheets and more. All of these together provide valuable insight as to how your business is performing and help guide the direction of your business. Payroll services make it easier than ever to pay employees, cash flow forecasting aids in creating a game plan, and receivables and payables management helps you understand your commitments.
Companies such as Enkel tailor packages to your needs based on the size of your business. Entry level packages start at $700 per month.
3. Hire in-house
The sure-fire way to get your finances sorted out is to hire your own bookkeeper. This way you won’t have to toil over the paper trail – it will all be taken care of. Hiring someone full-time or part-time is an action most likely reserved for larger businesses simply due to the cost and the amount of back office work that needs to be done. Many small businesses may only require these services seasonally so they cannot justify the cost of hiring someone full or part-time.
Rates for bookkeepers vary based on previous experience in the field, so it is possible to hire a bookkeeper for as low as $20 or $30 an hour, but expect to pay more if you are looking for someone with more experience and seniority. Rates for accountants are higher but a small business will typically only require an accountant when it is time to file taxes.
Which option is best for my business?
This is a tough question to answer, as every small business has different needs. Your size, number of clients and employees will play a large role in your decision. Small businesses who are still building their list of clientele and have fewer employees would be well suited to using an app such as Quickbooks to keep track of their finances.
The decision also depends on you – the owner – and how much time and effort you are willing to put into the bookkeeping. If you are less motivated, then outsourcing the work may be your best option; and while it is more expensive, your books will have fewer inconsistencies (which you’ll be thankful for when it’s time to file taxes).
As your small business grows, you may decide that hiring in-house is the way to go. This requires a bigger commitment financially, but having a bookkeeper available assures you remain organized at all times. That being said, you must consider whether your business requires enough hours from a bookkeeper to justify the investment. If you find yourself wishing you had them on hand, or calling them frequently it may be a good time to hire one part or full-time.
With all the options available to small business owners, there’s no time like the present to get your books in order. We hope this helps you make the right decision for your business!