Have you ever found a $5 or $10 error in your personal checking account? Mistakes happen. What if this was your business account and the mistake was five or ten thousand dollars?
A professional bookkeeper can help prevent financial errors in record keeping. You can then focus on business growth strategies. Continue reading to learn about some key tips for finding the right bookkeeper.
Cost of Hiring a Bookkeeper
New or small business owners often worry about expenditures. It’s difficult to decide if hiring a bookkeeper is the best financial choice. Here is a breakdown of the costs associated with hiring a bookkeeper.
Time Required for the Hiring Process
For business owners, “time is money”. It takes time and money to advertise for a bookkeeper. Next, you will spend time in the interview process.
Contacting and speaking with the applicant’s references is also time-consuming.
Time For Establishment of the Bookkeeping System
It will take time to set up and integrate the bookkeeping system into your business. The bookkeeper will need time to become familiar with your unique business needs. You need to meet with the bookkeeper on a regular basis to ensure your interests are met.
Fees for Bookkeeping Service
Bookkeeping fees vary. An initial agreement needs to clarify the method and manner for billing. For example, is there an hourly or flat fee for services? Does the bookkeeper receive a monthly retainer fee?
You may already have a financial software program that you use. Find out if the bookkeeper is familiar with this product.
If not, you may need to buy a system, such as QuickBooks. The bookkeeper may charge for the initial set up process.
Benefits of Hiring a Bookkeeper
Bookkeepers help decrease or eliminate financial errors. Mistakes including inaccurate data entry or lost transactions can cause significant losses. Professional bookkeepers improve record keeping accuracy and recognize errors before it’s too late.
Paying your business bills late or missing payments damages your credit standing. The bookkeeper ensures all payments occur on time.
Some business owners have trouble tracking customer invoicing and payments received. This can lead to delivering products or services without receiving payment.
Bookkeepers also collect customer payments in a timely fashion. They can handle calculating and charging late fees as appropriate. This ensures that you have the money you need to meet your financial obligations.
Bookkeepers can provide regular reports outlining your income and expenses. They can also assist you in financial planning and tax management.
Tasks That a Bookkeeper Manages
You and your bookkeeper should agree upon the tasks they will manage. This may vary depending on your financial expertise and the type of business you own. The following are common tasks bookkeepers manage.
- Managing the businesses financial obligations such as loan payments
- Calculating payments owed to the company for products or services delivered to the customer
- Ensuring that records such as documented expenses and the actual amount deducted match
- Creating online banking accounts
- Managing the depreciation of fixed assets, correcting inventory differences, tracking work in progress, and posting billing documents
- Collecting employee work time, paying employee wages, and managing benefits and deductions
- Organizing and implementing bookkeeping practices and internal controls
- Completing monthly, quarterly, and end-of-year financial reports and responsibilities
Bookkeepers provide ongoing process improvement to ensure the accuracy of financial records. They also manage tax reporting requirements.
Tips for Hiring a Bookkeeper that Fits Your Business
If you’re ready to hire a bookkeeper, here are some tips to help you find the perfect fit for your business.
1. Hire a Person Who Understands Your Business
It’s key that the bookkeeper understands your industry and unique financial needs. Ask the applicant about their experience with businesses like yours. Have they worked with companies that are about the same size and have the same number of employees.
Bookkeepers that don’t understand your business may create costly errors. They may not have the experience and foresight to guide your financial path.
2. Choose a Local or Virtual Bookkeeper
You will want to connect with your bookkeeper personally on a regular basis. Hiring someone in your area isn’t always a requirement especially with the amount of online collaboration and meeting tools available such as GoToMeeting, Slack, and QuickBooks Online. Whether you choose a local bookkeeper or someone remote, make sure they understand local business laws and other regulations.
An experienced local or virtual bookkeeper will have first-hand knowledge of financial strategies that work best with the customer base. They can provide suggestions for increasing your revenue.
3. Check for Credentials and Credibility
Ask about the applicant’s training and real-world experience. Do they have any type of certification? Two examples of bookkeeper certification include:
- The Certified Public Bookkeeper license accredited by the National Association of Certified Public Bookkeepers
- Certified Bookkeeper accredited by The American Institute of Professional Bookkeepers
Have them describe examples of other businesses they work with. Request professional references.
Remember that individuals only provide positive references. You may talk with other business owners and check internet customer rating sites. Spend enough time talking with the person to determine your comfort level.
You must trust the person managing your business finances. They have access to all financial records. Even the most experienced bookkeeper can mess up your records or embezzle money.
4. Ask What Software They Use
Before you decide to hire an individual, ask what accounting software they use. If you already have a software package that you prefer, will they use that? If not, will you have administrative rights to their software?
You must maintain access to your financial information. All accounting files must remain clear and transparent for your own protection.
5. Make Sure They Have Tax Experience
Over the life of your business, taxes can have a compounding effect on your income. Thus, it’s important to decrease your tax burden in line with tax laws. This will help you reach financial goals quicker.
Make sure that your bookkeeper is well versed in all tax law changes. They should guide you in creating the best tax-efficient structure for your company.
Are You Ready to Hire a Bookkeeper?
While hiring a bookkeeper means spending money, ultimately, you will realize a financial benefit. Competent bookkeepers understand their client’s financial landscape. They know how to evaluate processes and see the big picture.
At Fourlane, we tailor our bookkeeping services to meet your company’s unique needs. We take time to learn about your type of business, business processes, and budget. We use QuickBooks to manage your company’s financial processes.
Contact us today to learn more about our bookkeeping services.