Moving Up – Is it Time to Hire a Bookkeeper?
Our personal lives are full of easily identifiable milestones like getting married, and having children. Small businesses have milestones that are sometimes not as easy to spot. One such challenge for startups and small businesses is knowing when the time is right to hire skilled financial help like a bookkeeper. Promotional material from software companies can give business owners the impression that there is never the need for professional help, just click here and everything will be okay.
Even if you are an accounting software wunderkind there will come a point where everything that needs to get done is either too complicated, too time-consuming or both. The signposts pointing out the need to change from a do-it-yourself’er to going pro can be blocked by stubbornness or ego. After all, it was your go it alone attitude that put you into business and got you this far. The good news is that you are not alone and help is closer than you think.
They’re Too Expensive!
A common excuse for putting off hiring a bookkeeper is concern about the cost. This is usually due to confusion concerning the difference between an accountant and a bookkeeper. A CPA can easily cost $150 an hour or more, putting them well beyond the reach of most small businesses daily or weekly recordkeeping budget. But bookkeepers are not accountants, they are record keepers who have a specialized knowledge and understanding of accounting principles and they are far less expensive than an accountant.
A bookkeeper is not a substitute or low-cost replacement for your accountant. The relationship between a bookkeeper and an accountant is similar to an architect and a builder. The builder has the know how and skills to build a home, but he needs plans from an architect to follow in order make sure the house is up to code and passes inspection. A bookkeeper builds your financial records based on instruction from your accountant.
The Sooner the Better
The earlier in the life of your business you bring on a bookkeeper, the better off you will be in the long run. It is surprising just how many mistakes you can make in a very short time while trying to maintain your own books. Even small mistakes can snowball into rather large financial avalanches that need an expensive accountant to fix. Typically, most new businesses are ready for a part-time bookkeeper when they are six to nine months old. If you’ve been in business longer than that, don’t panic, but do seek professional help.
The best way to find a quality bookkeeper is by asking for referrals from other business owners. Your accountant may also be a good resource for finding and hiring a good bookkeeper. In fact, many accounting firms have bookkeeping departments that work with their clients and are familiar with the accountant’s preferences and can easily provide added guidance if the bookkeeper runs into an unusual situation.