Do you really need to hire a bookkeeper? If you’re a small business owner, the short answer is usually “yes”. Having access to accurate, up-to-date financial information is the only way to make informed business decisions.
Newer business owners sometimes keep their own books—usually as a way to save money. But many of these entrepreneurs drop the ball on their bookkeeping when:
- Their business begins to grow
- Their focus shifts to other priorities
To really dig into why you should hire a bookkeeper for your business, we need to take a closer look at what these professionals do—and how outsourcing your bookkeeping can save time, keep you on top of your business finances, and help do away with numbers-based stress.
What does a bookkeeper do?
A bookkeeper is responsible for recording, reconciling, and reporting your company’s day-to-day business transactions.
Their tasks typically include:
- Recording your daily sales and expense activities
- Performing monthly credit card and bank reconciliations
- Generating monthly and annual financial statements like balance sheets, income statements, and statements of cash flow
Professional bookkeepers know how to use both accounting software and proper accounting methods to organize and track your financial data.
By ensuring all your financial reporting is accurate and up-to-date, they provide valuable insight into your business performance so you can make better decisions.
Why hire a bookkeeper—instead of just doing it yourself?
There are several excellent reasons why hiring a professional to manage your books will benefit your business.
1. Bookkeeping takes up too much of your valuable time
Unless you’re a bookkeeping consultant, there’s a good chance bookkeeping isn’t your main responsibility—and an equally good reason why it shouldn’t be.
All the valuable time you spend:
- Doing data entry in your accounting system
- Verifying your cheques have been cashed, or
- Splitting out and filing taxes for your accounts receivable and accounts payable transactions
… is time that could be better spent running your business!
If you’re spending more time than you’d like doing bookkeeping, it’s probably time to bite the bullet and hire a good bookkeeper. By outsourcing your accounting tasks, you can free up more time to market your business, improve operations, or better manage your work-life balance.
2. Keeping your books up to date can be challenging
With so many priorities vying for your attention as a business owner, it can be tough to stay on top of your financial activities.
Without proper and timely bookkeeping, however, it’s easy for transactions to pile up and go unrecorded until the end of a financial period. Not only can this lead to mistakes being made, key details can also be lost or forgotten.
One of the most important parts of a bookkeeper’s job includes:
- Setting up and managing an organized document storage system
- Categorizing and recording receipts and invoices based on expense type
- Ensuring access to source (supporting) documents for all your transactions should the CRA ask to see them
Not only will hiring a bookkeeper keep your business audit-ready, but you also won’t have to worry about unpaid bills, late fees, or damaged vendor relationships.
By ensuring all your incoming and outgoing transactions are kept up to date, a bookkeeper can also help you build up your business credit, making it easier to secure a loan when you need one.
3. You are not a numbers person
It isn’t unusual for a business owner to be a jack-or-jill of all trades—or for the complexity of their bookkeeping to grow alongside their business. What is unusual is for a small business owner to also be a trained bookkeeper or “numbers person”.
Taking on the role of DIY bookkeeper typically means having to track and understand:
- Debits and credits
- Inventory costs and business expenses
- Invoices, payroll, tax returns, budgets—and how to do double-entry bookkeeping
The knowledge and commitment required to manage tasks like these can overwhelm even the most enthusiastic entrepreneur!
Professional bookkeepers, on the other hand, are trained or educated to handle all your high-level financial details: from setting up and customizing your business’s chart of accounts, to calculate your sales tax liabilities. Good bookkeepers can even help you interpret your numbers.
You might not need to hire a bookkeeper full-time. But investing in a part-time bookkeeper—or outsourcing to a professional bookkeeping firm—will help you avoid costly bookkeeping errors, while making it easy to stay on top of your financials.
The best time to hire a bookkeeper may be right now
Take a good look at your current situation: Are you procrastinating when it comes to doing your bookkeeping? Are your books getting more complicated? Are you spending too much time keeping your books?
If you answered “yes” to any one of these questions, the time to hire a bookkeeper may be right now.
Hiring a bookkeeper to categorize and record your business transactions isn’t just the best way to keep your financial information organized and up to date, it can make it easier to:
- Focus on more pressing business priorities
- Manage your cash flow more effectively
- Achieve more realistic business decisions
Whether you’re considering hiring in-house or leveraging external bookkeeping services, you should view the value a bookkeeper provides as a long-term investment: an upfront expense that ultimately saves time and money. Just make sure the person you choose to work with is someone you can rely on. Entrusting the financial details of your business to anyone is a big step. So do your research carefully before you hire a bookkeeper—and remember that Enkel can help.