Last Updated on August 4, 2023 by Treana Wunsch
Bookkeeping can also be an incredible tool for growing your business. If the books are kept up to date, areas for improvement can be spotted and mistakes can be found before it’s too late. Trends can also determine whether you’re spending too much or not enough.
Hiring a bookkeeper for a small business can save time and money, reduce stress, and enable you to build your business. Here’s how:
Hiring a bookkeeper for a small business saves you money
Don’t have your accountant do your small business bookkeeping
Many business owners don’t know the difference between a bookkeeper and an accountant so they gather all their paperwork up at the end of the year and hand it off to an accountant. This is a mistake.
Accountants are highly specialized in their field and handle analysis, structuring and consulting for a company. A bookkeeper is a more administrative role and fulfills the day-to-day financial tasks and management of a company. An accountant charges anywhere from $150-$400 per hour. You don’t want to have them fixing your mistakes and entering tedious transactions when hiring a bookkeeper is much cheaper. Save your accountant for financial consulting and corporate tax filing. Hire a bookkeeper for record-keeping.
A bookkeeper will keep up to date on payments and payroll
There are many expenses to keep track of when you own a business. It can be difficult to keep up with payments and payroll, but it’s important to do so in order to avoid any late fees or penalties. There are a number of online tools that can make this process easier, and employers should also make sure they’re following the latest tax laws. Businesses can avoid any potential problems down the line by staying informed.
Hiring a bookkeeper for a small business will help ensure you are up to date on any payments and compliant with tax laws. This could save you hundreds, even thousands of dollars on late fees and interest charges. It will also keep your credit in tip-top shape. They will also ensure your employees are paid on time and that there is enough cash flow to cover payroll.
Most business owners see a bookkeeper as an expense but they don’t see the big picture. Successful business owners know that hiring a bookkeeper will save them thousands of dollars per year.
Hiring a bookkeeper for a small business reduces the risk of human error
If you’re not familiar with small business bookkeeping there is a good chance you will make mistakes. If don’t know what you’re doing, it can take a lot of time for someone who isn’t familiar with your company file to fix it. This will end up costing you much more than if you had hired a bookkeeper from the beginning.
Data entry errors are the most common bookkeeping errors. They cause disruptions in financial reports and can lead to costly mistakes. To prevent these errors, make sure you have accurate records of your transactions. Hiring a bookkeeper can reduce these errors as they will reconcile the transactions monthly.
The fewer things we focus on, the more successful we will be. I talk about this in my article about how multitasking makes you bad at everything. So the more you take off your plate the better.
Hiring a bookkeeper saves you time
Get paid on time
You may be too busy to chase down client payments but even if you’re not, it’s difficult to ask clients for money. Having a third party handle the collections keeps the relationship between you and your clients happy. A bookkeeper will also have strategies to get the payments on time with less conflict.
Also, the longer you wait to collect outstanding invoices the harder it is to collect. A bookkeeper will be able to focus on collecting outstanding payments within 90 days. If you aren’t collecting payments on time your cash flow will suffer and you may end up not being able to meet your own financial obligations. This is one of the top reasons for businesses failing.
Liaison between you and the accountant
Accountants and bookkeepers speak a similar language. Having them communicate directly can save the business owner a lot of time by not having to relay messages back and forth. There is also a holistic approach to your financial needs when the two professionals work together.
Not to mention, the accountant can offer guidance to the bookkeeper in regard to how to categorize transactions and set up accounts according to the business tax strategy.
Keeps you organized
A bookkeeper will organize and file your receipts so they can be found quickly if needed. Besides, who really likes sorting and filing receipts anyway? Online document management platforms and apps such as Quickbooks Online make it even easier. There is no back and forth with paper documents and if something happens to a hard copy there is a backup. Virtual bookkeeping is the way of the future.
More importantly, in the event of an audit by the CRA or Saskatchewan Finance, you won’t be paying for or spending unnecessary time searching for documents. They will be organized so they are easy to find.
Hiring a bookkeeper reduces stress
Do it on a regular basis
Keeping up to date with your books takes it out of the back of your mind. You’re not constantly running numbers in your head or making sure you have enough money in a particular account to make a specific payment. It frees up space in your head to focus on the task at hand. You’re also never having to wonder if your business is where you want it to be from a financial perspective. You will have monthly reports to compare and analyze. Plus, you’ll always know what you owe the government throughout the year.
If it’s not your thing, let someone, whose thing it is, handle it
If you think you’re impressing people by doing everything yourself, think again. The smartest and most successful entrepreneurs know what they don’t know and surround themselves with a team of experts. The only way to grow your business is to delegate and outsource. It’s impossible to do it all yourself if you want to be successful.
Gatekeeper for the finances
If you have a partner or partners, having an impartial person in charge of the finances when issues arise can be invaluable. They can create and manage approval processes that partners must follow in order to withdraw or spend money. Hiring a bookkeeper for a small business is also beneficial for solo business owners who don’t necessarily have the best spending habits.
Enables you to build your business
Focus on the prize
Your business needs you to create, sell and produce. Your specific gifts and talents shouldn’t be wasted on business tasks that keep you from doing that. You cannot create strategies or improve products or services if you’re worried about keeping up with your books. Hiring a bookkeeper for a small business will free up several hours per month so you can focus on what’s important.
Getting an outside perspective
It always helps to have another set of eyes, other than yours on your finances. They may see things that you would never spot…ways of saving money, and areas where you could spend more (marketing, training etc). They can see the big picture when sometimes the business owner is too ‘close’ to the business.
Don’t burn out
If you’re doing everything and working countless hours every week, when do you have time to do the things you love? If you’re not living a balanced life, there is no space for you to come up with ideas for new products or services or to expand your business. Don’t fizzle out, your business depends on it.
If you still want to tackle your bookkeeping on your own, sign up for QuickBooks Online. It will make your bookkeeping a heck of a lot more efficient.
If you have decided your business needs to outsource the bookkeeping, check out my packages here.
Let me know in the comments how hiring a bookkeeper for a small business has improved your business!