Bookkeeping can often be a challenge for many entrepreneurs. It’s often one of those tasks you think is easy to take care of on your own, but you know as well as I your time is precious and can be better spent elsewhere. It’s virtually impossible to attend to every aspect of your business and sometimes even more difficult to let things go.
If you’re already DIY’ing your bookkeeping, you’re probably using a software such as QuickBooks or Xero already, or you may even be just utilizing a simple system of Excel spreadsheets. But did you know there are tons of other software’s available to you at lower costs that could be saving you money? Or you may even need something a bit more robust that your current system just isn’t doing. While saving money is a big factor, at times hiring a bookkeeper can actually save you more money in the long run.
This is where outsourcing a bookkeeper comes in handy. If you happen to be a freelancer or small to mid-size business and don’t have the time to attend to your bookkeeping, or you’re struggling to put a system in place then you’re in the right place. There’ll be a time when you come to realize, bookkeeping just isn’t where you want to spend your extra time. There are a number of affordable options when outsourcing a bookkeeper and you can read more about the different types of services available to you here.
If you’re still on the fence, here are some tips on deciding when to hiring a bookkeeper is the next step to growing and managing your business. But before we get to the nitty-gritty let’s clear up a few myths:
Bookkeepers – what do they do?
It’s a common mis-perception to mix a bookkeeper with so many other jobs like a personal assistant or an accountant. A bookkeeper is hired to record the financial transactions (that includes organizing, collating, recording and maintaining etc.) of any business to keep your taxes in check, your employees and bills paid, and invoicing up to date. An efficient bookkeeper will keep track of sales, receipts, purchases and payments as well.
Are they different from Accountants?
Yes, and they are often confused with each other. They have similar tasks, but the scope and scale differentiate them. Bookkeepers keep the accounts in accurate form with day-to-day recordings. They assist you with timely advice on late invoice payments, cash flow problems etc. We also prepare the paperwork your accountant will need when tax season comes around. An accountant will review your account periodically (usually per quarter) and file financial reports and tax returns. It’s important to be conceptually clear that a bookkeeper and an accountant are not interchangeable.
When to hire a bookkeeper?
If you are a freelancer or a startup then you need to focus on some very pressing issues like marketing, client handling, recruiting and production, etc. With so much happening around you, it would be hard for you to focus on your financial transactions and visibility. Ideally, a bookkeeper is an indispensable member of your team right from the get-go. As soon as money starts to flow in and out – your recordkeeping journey begins! Such as paying bills or receiving customer payments, calculating estimated tax payments or payroll. You’ll soon find it difficult to keep up with crunching the numbers and your workload.
There’s a ton of information to record. And believe me, it’s a serious hassle if you have little idea or knowledge of the tedious bits and pieces you need to keep track of. Without a professional bookkeeper, it’s nearly impossible for you to keep a proper record of every transaction going in and out of your business. Also, it’s a good idea to have another person review your bottom-line and ensure you are making the most profit you can. This can result in serious financial mistakes and monetary losses that you definitely want to avoid. Ideally, you’ll want to focus on what you love doing rather than what you don’t, the numbers.
Feel free to check out how we work here and the different options available to you here. I’m sure you’ll find a bookkeeping solution to fit your needs and if not we can come up with a customized solution too. Let me be the “nerd” and crunch the numbers so that you can continue doing what you love!