How to Find and Hire a Bookkeeper
Running a small business can be like solving a big financial puzzle. You have income and expenses to balance, tax regulations to follow, and payroll to manage. It can feel overwhelming, but fear not! A bookkeeper is here to help.
In this blog, I’ll guide you through the process of finding and hiring a bookkeeper for your small business. We’ll explore why every small business needs one, what they do, and everything else you should know.
Contents
Why Every Small Business Should Have a Bookkeeper
There are plenty of great reasons to bring a bookkeeper on board. According to the Small Business Administration (SBA), small businesses that keep accurate financial records are 50% more likely to stay financially stable. Here’s why:
- A bookkeeper helps manage cash flows and prevents bankruptcy.
- Poor financial records can result in tax penalties, legal troubles, and audits.
Did you know that keeping good financial records can significantly increase your chances of getting funding to grow your business? According to the Federal Reserve Bank, having solid financial records makes it much easier for entrepreneurs like you to secure the financing you need.
The Important Role of a Bookkeeper in Making Financial Transactions Easier
Let me tell you about the things a bookkeeper does. Understanding what a bookkeeper does can really help businesses find the perfect person for the job.
Making Financial Reports
So, here’s what these amazing experts do. They gather information from various places, like bank statements, invoices, and receipts. Then, they use all that data to create important financial documents, such as balance sheets and income statements.
Take Control of Your Finances
Have you ever wondered what bookkeepers do? Well, let me break it down for you in simple terms. Bookkeepers are like financial managers who handle all the important transactions and keep things organized.
Make Sure Everything Adds Up
Picture this: bookkeepers are like detectives for numbers. They enter data into an accounting system and organize it in a way that makes sense. They also make sure everything is done according to the rules and regulations of accounting. It’s like a big puzzle that they put together!
Keep an Eye on the Details
Bookkeepers are like super sleuths when it comes to accuracy and compliance. They stay up to date with all the latest rules and regulations. They also keep track of how well a business is doing financially and compare it to the budget. If they spot any areas for improvement, they make suggestions on how to make things even better.
Boost Your Cash Flow
Here’s the deal: bookkeepers are experts at spotting trouble in the cash flow. They know all the tricks to increase the amount of money coming into a business. They make sure that the cash flow is flowing smoothly, like a river that never runs dry.
How Professional Bookkeepers Can Improve Your Business
When it comes to managing your finances, professional bookkeepers play a crucial role. Let me tell you how they can enhance your business.
- Firstly, bookkeepers ensure accuracy by carefully comparing the numbers in your books with your bank accounts. This way, they help prevent any mistakes or discrepancies. Additionally, bookkeepers provide unbiased financial reports, helping to eliminate any hiring bias.
- Secondly, bookkeepers take care of compliance. They stay updated with the latest federal, state, and local tax regulations, ensuring that your business is always in line with the law.
But their expertise doesn’t stop there. Bookkeepers can also offer valuable insights on cost control. By conducting a detailed financial analysis, they can identify areas where your business might be overspending or being inefficient. Through sorting through accounts receivable, bookkeepers can pinpoint any areas that can be optimized.
Choosing Between a Freelance Bookkeeper, In-house Bookkeeper, or Firm
When it comes to hiring a bookkeeper, you have three options to consider. Each choice has its pros and cons, so it’s important to think carefully. You might even wonder, should I ask a family member to take on this role?
What to Expect from a Freelance Bookkeeper
A freelance bookkeeper can be a great option, especially during busy times. They’re flexible and can handle a high volume of work. One of the best things about freelancers is that they offer personalized services and have unique financial expertise. Plus, they’re easy to find on job platforms, making the hiring process simple.
Another advantage of freelancers is that you don’t have to worry about fixed expenses like you would with a full-time employee. Hiring a freelancer or a part-time bookkeeper can also save you money in other ways.
Discover the Benefits of Hiring Experienced Bookkeeping Services
Let me share with you what happens when you decide to partner with an experienced bookkeeping firm.
They are Masters of Handling Huge Amounts of Data
When you hire the best companies, they come equipped with advanced tools that can automate financial reporting, reconciliation, and even data entry. With the help of software, the chances of errors occurring due to manual entry are greatly reduced.
We’ve Got a Team of Experts
At our company, we’ve gathered a group of top-notch professionals who are experts in their field. And the best part? They’re ready to help your small business with all your taxation, financing, and accounting needs.
We Use the Latest Tools
We don’t settle for less when it comes to technology. Our bookkeeping company invests heavily in advanced accounting tools and software, so you can rest assured that we’re on top of the latest industry practices.
The Benefits of Having an In-House Bookkeeper
Having an in-house bookkeeper brings a whole set of advantages. For starters, they provide you with real-time financial insights because they have direct access to all the necessary data. But that’s not all! They also have the opportunity to fully immerse themselves in your company culture, allowing them to truly understand your goals, challenges, and specific needs. Plus, they might even come up with some unique ideas to promote a job opening within the finance department.
Hiring a Bookkeeper: Steps You Should Take
When it comes to hiring a bookkeeper, it’s important to follow specific steps to ensure compliance and accuracy with your numbers. First, you want to send out an interview rejection letter to candidates who were not selected. Then, you can move on to finalizing your chosen hire.
Step 1: Assess Your Business Needs
To begin, you need to determine what your business requires from a bookkeeper. Small businesses usually need a bookkeeper for payroll and invoicing purposes. On the other hand, medium to large enterprises may require someone who can assist with budgeting and forecasting. Certain industries, like healthcare, have specific regulations that need to be followed. Additionally, some businesses may need a bookkeeper with expertise in cash flow management.
Make Sure the Bookkeeping Certifications Are Legit
- Keep an Eye Out for Certified Public Bookkeepers (CPB): This certification ensures that the bookkeeper follows ethical standards and knows their accounting principles.
- Look for the Certified Bookkeeper (CB) Title: With this certification, you can trust that the bookkeeper has mastered all the fundamental accounting skills.
- Consider Other Professional Certifications in Bookkeeping: Some other certifications to look for include Certified Management Accountant (CMA), which focuses on management accounting. Another valuable certification is QuickBooks Online Certification, showcasing the bookkeeper’s expertise in using that specific software.
Hold Interviews and Don’t Forget to Check References
Let me show you something cool!
Let’s Talk About Terms, Fees, and Expectations
When we talk about these three things, it’s really important that we communicate with each other. We have to be open to feedback and be willing to make changes if needed.
It’s also crucial to have everything written down in a contract. This way, we can clearly document what we expect from each other, the fees involved, and the terms we agreed upon.
Finalizing the Agreement
- We need to clearly define the services that will be provided.
- We have to agree on how and when payments will be made, as well as the fee structure.
- We must also include a detailed section on how we will secure and keep any sensitive information confidential.
Bookkeeping Software or Human Expertise: Which is Better?
When it comes to managing your finances, you have two main options: using bookkeeping software or relying on the expertise of a human professional. Each option has its own benefits and considerations, so let’s explore them!
- Personalized Attention and Complex Needs: If you have unique financial requirements and need specialized attention, a professional bookkeeping service is the way to go. With their expertise and experience, they can handle complicated matters and provide you with tailored assistance.
- Remote Business or Small Budget: On the other hand, if you run a remote business or have a small budget, software or a virtual bookkeeper can be a great fit. These options are cost-effective and can meet the basic bookkeeping needs of small businesses.
Whether you choose software or a human expert, both options can provide you with timely insights and responsive support. You can rely on either of them to address urgent matters and ensure that you stay on top of your financial game!
Frequently Asked Questions: Hiring a Bookkeeper
Here are some common questions and answers that will help you make decisions about hiring a bookkeeper.
Is it cheaper to hire a freelance bookkeeper instead of a bookkeeping service?
Generally, freelance bookkeepers tend to be more affordable. This is because bigger bookkeeping firms have additional costs to cover. However, both options can provide accurate financial statements.
Does a small business need both an accountant and a bookkeeper?
Having both an accountant and a bookkeeper can be beneficial for small businesses. Bookkeepers take care of day-to-day transactions, while accountants look at the bigger picture, including budgeting, forecasting, and tax filing.
How can a bookkeeper help improve cash flow in a small business?
A bookkeeping professional can review your expenses regularly and follow up on overdue payments. This proactive approach can help ensure a healthy cash flow for your small business.
