Chances are, you didn’t start your own small business because you wanted to spend your time on bookkeeping. Handling expense receipts and invoices, along with all the other tasks that come with careful and meticulous bookkeeping, are a crucial part of running a business. But we can all agree these tasks easily suck up a huge amount of time—time that you could be spending doing what you do best, which is running your business.
There’s always the option of hiring a bookkeeper to take the load off your hands—but with this choice comes the added expense.
So how do you know when it’s time to pull the trigger and start spending money on a bookkeeper? When is it necessary to take on this additional expense?
Unfortunately, there isn’t a perfect formula that lets you plug in numbers to get an answer. But here are some key considerations that will guide you to make the smart choice for your business.
1. Are you spending time on bookkeeping tasks that take you away from more important work? Or are you putting off bookkeeping responsibilities because you don’t want to deal with them, meaning things could fall through the cracks?
Most small business owners don’t have an accounting background, so a lot of the work of bookkeeping is out of their area of expertise—meaning it takes more time. A veteran bookkeeper can handle all the day-to-day tasks that can be baffling for those who don’t do them repeatedly, including: making sure new employees file their payroll paperwork; submitting and tracking invoices; paying the bills; tracking company expenses; and ensuring all your documents are in order at tax time. These are tasks that could easily be eating away at your days—meaning that you’re losing valuable hours you could be devoting to building your business. Or they may be tasks you’re putting off until the end of the day, or month, or year, so important details might be missed.
Your bookkeeper can also streamline reporting to, say, creditors or investors, meaning you aren’t stuck monitoring deadlines.
2. Does your business involves a lot of expenses, and is tracking them a bear?
A bookkeeper can help you get the most of your accounting software by making sure everything is accurate, up to date, and that nothing falls through the cracks. If you deal with a high volume of expenses, a bookkeeper can help systematize everything, and perhaps introduce you to useful apps like Expensify, which can simplify tracking expenses for you and your employees. Your bookkeeper will also spend a few hours each week making sure they’re all accounted for and categorized properly. This work alone could save you hours of wading through receipts and credit card statements at the end of the month (or year).
3. Are you ready to grow, and money is coming in and going out, but you don’t have a strong sense of where the opportunities for growth lie?
Once you’re a year or so into the business, the chances are you’ve begun to see trends and regular patterns with revenue. At this point, it’s time to add a little strategy to the mix. A bookkeeper can help you shine a spotlight on the trends, so you can gain insight into new ways of saving, as well as spending more wisely. You can also see a clearer path for your revenue streams, meaning you can determine where the big money is coming from, and where you should focus your efforts if you want to grow.
GENERAL INFO ON BOOKKEEPERS
A part-time bookkeeper can be a good idea to help close out the month, prepare payroll, or help prepare for tax deposits. Rates for a part-time bookkeeper can range from $15 to $65 per hour, depending on your location, the bookkeeper’s location (remote or in-office), and the overall workload.
Another option is to employ a third-party vendor such as Bench that offers bookkeeping services to smaller businesses.
A full-time bookkeeper isn’t typically needed until a company has grown to between 30 and 50 employees, and has revenues topping $1 million. Granted, every rule has exceptions.
As a rule of thumb, if you’re calling your part-time bookkeeper every day and/or requiring more than a few hours of his or her time each week, it’s time to consider bringing someone on full-time. There are also companies that provide bookkeeping services to smaller business than can’t justify an employee.
Related Articles
