When to hire a bookkeeper?
Small businesses tend to accomplish as many tasks as they can themselves. The owners either themselves carry out these tasks, or they delegate it to their staff. It is one of the ways to cut down costs as they lack the resources to hire employees for each job that needs to be done. Bookkeeping is just one of these tasks. It’s not a particularly difficult job, especially when you have online help and bookkeeping software. So, why hire a bookkeeper? Surely, you don’t need to spend extra bucks on getting outside help when it is possible to do it yourself? The answer to these questions depends on your company’s situation.
Initially, when a business is just starting, you may find the time to keep records of each and every financial transaction. But eventually, there comes a time when bookkeeping for your company yourself may be doing it more harm than good, and you need to ask, “Do I need a bookkeeper”? But how do you know whether that time has come? There are a few signs that can let you know it is time to hire a bookkeeper.
You are focusing on non-core activities.
If you own a business, your sole focus should be its development and growth. Running a business is not easy, and there are far too many tasks that require your attention. Bookkeeping isn’t one of them. When you are spending valuable time ensuring your financial records are straight, your business might be suffering. An entrepreneur needs to be efficient. It is not advised to spend time and effort on jobs that can be better handled by experts from that field. It leads to you overworking and risking burnout. Unless you can justify the time you spend weekly on bookkeeping, it is time to hire a bookkeeper.
You are making mistakes in bookkeeping.
Bookkeeping, even though a straightforward job, holds importance in finance and accounting. Your accountant can balance the company’s finances accurately only if the bookkeeping has been done accurately. The accountant, in essence, relies on the data provided by the bookkeeper. Therefore, it is crucial that the financial transactions of your company be diligently recorded. Any mistakes in bookkeeping or payroll can be troubling to the company and may lead to fines or penalties. Unless you are an expert in the field, you are prone to errors. Identifying every business expense or income correctly is essential as it can impact tax deductions. Furthermore, since bookkeeping might be an additional responsibility, you are spending a limited time every week on it and may miss out on some information leading to errors. Those errors can cost your company. It is better to have a professional take on the job instead of spending time on a job that you are not performing at a sub-par level.
You are unable to keep up with bookkeeping.
Day by day, as your business starts growing, and you start getting more clients or customers, your financial transactions and related paperwork will also increase. Proper records need to be maintained to avoid any errors and ensure your business is profiting. It becomes a full-time job requiring undivided attention. As the owner, your efforts and time will be focused on your company’s growth, and you may not find the time to devote to bookkeeping. In such instances, it is better to hire a bookkeeper instead of delegating it to another employee who might already be overwhelmed with work to keep up with the company’s growth. A bookkeeper will be able to manage the records competently.
Your accountant performs the bookkeeping.
You may not have a bookkeeper, but the chances are that you have an accountant because every business usually does. Sometimes, small businesses ask their accountant to handle the company’s bookkeeping as it is a part of finance and accounting. While it may be done to save the cost of hiring another employee, a bookkeeper, it inadvertently ends up costing them more. An accountant, based on their services and qualifications, charges much more than a bookkeeper. When a business asks an accountant to do the bookkeeping, they are paying far more to the accountant than they would have to pay a bookkeeper for the same services.
You are rushing during tax season.
Your accountant is responsible for filing the taxes for your company when the time comes. But they need complete financial information in order to do so, which becomes your responsibility if you are performing the bookkeeping duties yourself. If you find yourself working overtime during the tax season trying to get together a year’s worth of financials, then you are not handling the bookkeeping aptly. Chances are you have to talk with your accountant frequently during this time to account for every expense and income. A bookkeeper will keep up with your every transaction and file them accordingly to make it easier for the accountant to do their job.
Hiring a bookkeeper makes your life a bit easier as a business owner and makes your business far more financially sound. Understandably, small businesses hesitate to hire a bookkeeper because of budget constraints. But there is a cost-effective solution to hiring a bookkeeper in-house. With offshoring, you can hire bookkeepers in India who are experienced and qualified but cost far less than a bookkeeper in the U.S. So, not only do you have a bookkeeper to manage your transactions, but you get them within your budget. No more bookkeeping headaches and working overtime!