How To Know When Your Business Is Ready To Hire A Bookkeeper
Q: My business is less than a year old. I feel that I am growing to a point where I feel like I am outgrowing my very basic bookkeeping systems. That said, I don’t know if I’m at a point where I can outsource to receive help managing my money. What do you suggest?
A: Look at this, the owner of a young business thinking early on about financial systems and how to best manage their money. I love it! The fact that this question is a concern to you is a great sign. I also really appreciate your wanting to be fiscally responsible and not spend more than you can afford at this stage.
Whether it’s the right time for you depends on many factors. How many transactions do you make in a typical month? How much time are you currently spending each week and month on bookkeeping?
There a number of free tools that small business owners can use to assist them maintain their financial records. One that I recommend to many clients is Wave. There are limitations with any free software, but this is a great tool to help you manage and accept payments, track expenses, and create invoices.
That said, no matter how good the software, there is no replacement for well-qualified financial help for your business. What makes you feel that you are outgrowing your current system? Do you find that you are overwhelmed by the amount of transactions that you need to track, or are you having to put increasing amounts of time towards accomplishing a similar task?
If you are a service-based company, you have an hourly rate. Even if you have a product-based business, think about how much time you are putting into managing your finances. Then, consider what other revenue-earning tasks you could be doing with the same amount of time. There comes a time when the imbalance is such that the right answer is to outsource.
There’s no magic time or number for when to outsource, but especially as you look at your numbers, you know if your business has a growth trajectory. Investing in your business is important, but as long as you do so wisely. If you are able, putting aside money to find a qualified professional to help you create the right systems to track your expenses and income is a smart move.
Hiring a good bookkeeper will save you the stress of massive preparation at tax time, and give you the peace of mind throughout the year. Having awareness of your expenses will help you make important decisions for the future of your business, like when it is time to outsource other services or invest in equipment or workspace.
Having a bookkeeper with an accounting background is important so that they can work with even the most complicated transactions. There are areas where you can safely cut costs for your business, but that should not happen with any area relating to your finances. You get what you pay for, and you literally cannot afford to find out after the fact that you’re not getting the help you thought you were getting.
I could make a list of the famous musicians who lost their fortunes because they didn’t pay enough attention to the people who were keeping their books. Do not repeat their mistakes!
Managing your money involves having financial awareness, which includes being aware of the qualifications of those you trust with your finances. As a trusted part of your team, do your due diligence. Have at least one conversation, maybe more. Check references. Work with people referred by trusted colleagues.
By finding the right bookkeeper for your business, you will free up more time to be able to focus on revenue generation for your company. More time and more comfort regarding your books. It sounds a lot like paradise to me. Don’t forget to take advantage of resources like free consultations with companies like Closing Your Books to help you determine the specific services your company should pursue.
Best of luck to you!
Photo by Sharon McCutcheon on Unsplash