Five Signs It’s Time to Hire a Bookkeeper

Nov 28, 2023Bookkeeping

If you’re reading this post, it’s probably because you’ve asked yourself, “Do I need a bookkeeper?” several times over the past few months or weeks. If you’ve been thinking about this repeatedly, the answer is “YES. You need a bookkeeper.”

Don’t worry, we can help! Kimberly Ferguson, MSA, EA of Emerald Expectations, offers her clients expert bookkeeping, tax, accounting, and fractional CFO services. She aims to help small businesses grow profits, increase cash flow, and reduce their tax liability. Providing exceptional customer service is another pillar of her business, so you can be sure you’re getting the best possible financial guidance available.

In this article, we’ll discuss the benefits of hiring a professional bookkeeper for a small business owner, how to make sound financial decisions, and whether a virtual bookkeeper or DIY bookkeeping is right for you.

What do bookkeepers do?

First, let’s start with the basics. So, what does a bookkeeper do exactly?

Bookkeepers record daily transactions consistently in an easy-to-understand manner. They are responsible for managing, recording, and organizing transactions, and their output is typically what accountants use during tax season.

Bookkeepers commonly work on all or most of the following tasks:

  • Records daily or monthly transactions
  • Organizing receipts
  • Categorizing receipts and expenses
  • Recording journal entries
  • Conducts bank reconciliations
  • Look for errors in invoices
  • Generates reports

In summary, a bookkeeper’s primary duty is to organize and maintain business records so you can have a clear picture of how your business is doing financially anytime you need it, not just during tax season.

Five signs that – yes – it’s probably time to hire a bookkeeper

If you’re spending time Googling whether you need a bookkeeper or not, we can almost guarantee that you need one. If you’re still unsure, here are five signs that it’s time to hire a bookkeeper:

1. You’re feeling overwhelmed

Running a small business is no joke. As a business owner, you’re probably already wearing multiple hats as the CEO, chief marketer, social media manager, and maybe even stockroom specialist (also known as the person who physically packs your store orders). If you add bookkeeper, accountant, and financial manager to your roles, it’s no mystery you’re overwhelmed. Feeling overwhelmed also means you’re adding unwanted stress to your life.

2. You feel like you don’t have enough time

If you find yourself spending an excessive amount of time on bookkeeping instead of on your core business activities, it’s probably time to hire a bookkeeper. Outsourcing this task frees up more time for other sales-generating activities, such as marketing or closing new partnerships. Hiring a bookkeeper will also give you more personal time to spend with your loved ones or a hobby you’re passionate about.

3. Your business is growing

As your business grows and expands, your financial transactions will become more complex. You’ll have more receipts to organize, transactions to track, and cash to disburse. When you hire a bookkeeper, they can manage these tasks efficiently, ensuring you stay on top of your finances while your business continues to grow. Working with a bookkeeper will allow you to focus on your business instead of keeping track of receipts.

4. You need more help planning your financial future

Your business is growing, your customer base is expanding, so you ask yourself what’s next? Do you need new investors? Do you have enough cash in case you need to buy more supplies to accommodate an influx of new orders? Having a bookkeeper on board can help tell you where you stand financially and can help you decide your plans for the future.

5. You’re making mistakes at bookkeeping

You’re doing the best you can at bookkeeping, but you find that you’re making more errors as your business grows and becomes more complicated. You’re not tracking expenses correctly, you’re losing receipts, and you find yourself scrambling when tax season comes along. When you begin committing errors with your finances, this is another clear sign that you need outside help from a bookkeeper.

What to look for when hiring a bookkeeper

Here are a few tips on what to look for in a bookkeeper once you’ve decided that you’re ready to hire one.

1. Credentials and Experience

This goes without saying, but we’re going to say it anyway – hire someone who knows what they’re doing. Look at their experience, past clients, and technical skills. For example, you’ll want to hire a bookkeeper who is familiar with professional accounting systems such as Xero or Quickbooks, not someone using Google Sheets or Excel. It’s also a good idea to work with an EA, or an Enrolled Agent, to ensure everything is compliant and ready for tax season.

Also, you’ll want to work with someone with professional experience as a bookkeeper. While we have nothing against new bookkeepers who are just starting, a seasoned bookkeeper will likely complete their tasks quicker and more efficiently because of their working experience. Look for a seasoned bookkeeping professional.

2. Honesty and Trustworthiness

You will be handing over all your receipts, disbursements, and transactions to your bookkeeper. You’ll want to work with someone you feel comfortable with and one you have confidence in. Check their references and look at reviews from other past or current clients to gauge and understand their experience with the bookkeeper.

3. Efficiency

If you decide to outsource your bookkeeper, they will probably have other clients they are also working with. This means they have to be very efficient and organized to complete all their tasks with their different clients. They need to be able to carry out multiple financial operations at the same time. You want to feel like you’re getting your money’s worth and that your bookkeeper is making your life easier, not the opposite.

When should you hire a bookkeeper?

There are two ways of looking at this question:

1. When in your business life cycle should you hire a bookkeeper?

This question has several answers. Some will say to hire a bookkeeper right when you start a business. This way, there’s no need for you to try and experiment if you can handle your own bookkeeping. You also won’t need to transition from DIY bookkeeping to hiring one down the line because you’ll be working with one already from the beginning.

Others will say it depends on the business. Typically, business owners begin hiring a bookkeeper to help with their financial records and cash flow when it becomes more complicated due to the business growing. Also, if you experience any of the five signs mentioned above, it’s time to hire!

2. When is the best month of the year to hire a bookkeeper?

The answer to this question also varies. Most bookkeepers will tell you to hire one way before tax season starts so both you and the bookkeeper have enough time to prepare your financial data. You can hire one as early as May to prepare yourself for next year’s tax season. Others will say the end of a month is a good time to work with a bookkeeper because of the transition from one month to the next.

How much does hiring a bookkeeper cost?

The cost of hiring a part-time bookkeeper versus a full-time bookkeeper varies. A full-time bookkeeper makes about $36,000 to $58,000 a year. If you are hiring a full-time bookkeeper as an employee, you’ll also have to bake in additional expenses, such as insurance, benefits, more office space, extra office equipment and supplies, among others. A part-time bookkeeper’s average rate in the United States is $24 to $35 per hour.

Working with a professional bookkeeper, meaning you hire a company to act as the bookkeeper of your business, may charge slightly higher, approximately $75 to $150 an hour. The higher rate is likely because they have a pool of bookkeepers working for the company and accrue higher expenses (such as salaries and office space) than a freelance bookkeeper. The upside to working with a professional bookkeeper is that you are assured of working with experienced professionals.

If you’re unsure how much you should spend on a part-time bookkeeper, we can help! Emerald Expectations offers its Ruby Package, ideal for new businesses needing a simple tax and accounting approach. This package includes monthly bookkeeping, payroll processing, basic tax planning, and business and personal tax return filing. We guarantee that what you’ll spend on signing up with us will save you money in the long run. Contact us to learn more about our Ruby Package.

Learn DIY bookkeeping

If you’re still unsure if you need to hire a bookkeeper or you are confident that you don’t need to hire a bookkeeper (yet), we can still help! Our DIY Bookkeeping Den offers an introductory DIY Accounting Course and Coaching for small business owners. You’ll learn the fundamentals of accounting that will make you feel confident about managing your finances.

This course will teach you how to run payroll, pay contractors, track your bills, send invoices, reconcile your accounts, and understand your financial statements. Put simply, this course teaches small business owners how to correctly and efficiently manage their business finances while the company is still growing.

As mentioned earlier, Kimberly and the Emerald Expectations Accounting team are passionate about helping business owners with their finances. Whether you avail of one of our packages or enroll in the DIY Bookkeeping Den, we’re still doing what we set out to do – give small business owners confidence and peace of mind when it comes to numbers and finances.

Hiring or working with a bookkeeper is a crucial decision that can significantly impact your business’s financial management. The first step is deciding whether it’s time to hire a bookkeeper or not. If the answer is yes, you’ll save time and effort, reduce stress, have peace of mind, and better understand your company’s financial health. Remember to choose a bookkeeper that’s skilled, efficient, and trustworthy.

If you decide you don’t need to hire a bookkeeper, that’s fine too! Maybe you’re one of those business owners who actually enjoy working with numbers and want to manage your company’s financial reports personally. Maybe you just need a little more guidance and additional training to become more confident in your bookkeeping and accounting skills. Staying on this path means continuing to DIY your bookkeeping, but with a deeper understanding of accounting fundamentals.

Whatever path you choose to take, Emerald Expectations Accounting can help. Kimberly and are at their best when they are helping small businesses and business owners. Whether you need a basic bookkeeping and accounting or you want full-service which include CFO services and retirement planning review, we have the right package for you.

Send us a message today and learn more about how we can help you.

Hi, I’m Kimberly.

Thanks for stopping by. At Emerald Expectations, we love making a big impact on small businesses like yours by educating, growing profits, increasing cash flow, and reducing your tax liability.

If you’re always worrying that something important is falling through the cracks or you feel like your current tax or financial strategy is lacking, we can help you offload that stress so you can feel at peace knowing everything is being taken care of.

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