Hiring a Bookkeeper: Best Practices & What You Should Know!!!

Hiring a bookkeeper

Have you ever been confused about whether to hire a bookkeeper or not? Or maybe you are clueless about what a bookkeeper can do for your business. If so, then you’re in the right place. This article will discuss what it means to hire a bookkeeper, the benefits of hiring one, interview questions you could ask when you decide to hire one, and basically all you should know.

Who Is a Bookkeeper?

A bookkeeper is a member of the accounting profession who is mainly in charge of keeping an accurate record of all sales, purchases, and other financial activities. Depending on the preferences and procedures of various institutions or individuals, there can be significant variations in the kind of transactions that are accounted for and how they are recorded.

Bookkeepers and accountants do different things and have different jobs, even though their titles are sometimes used interchangeably. In a sense, bookkeepers are on the front lines because they keep track of the daily inflow and outflow of money for an organization.

To produce reports, spot significant trends, and make estimates, accountants use the data bookkeeper’s track to focus on the bigger picture.

Hiring a bookkeeper

The majority of small business owners do not perform adequate bookkeeping procedures. Choosing how to maintain and manage the company’s financial accounts is one of the most crucial financial decisions a small business can make.

A bookkeeper’s role is to assist in recording daily business transactions. In a small company, a bookkeeper’s responsibilities are more varied.

They also manage the creation, management, and review of internal business processes, keep track of payments, purchases, receipts, and sales, compile and record financial data daily, and store it in a standardized manner so that accountants may also access it.

Hiring a Bookkeeper For Small Business

Your small business definitely needs a bookkeeper, as I mentioned earlier, and here’s why.

#1. A bookkeeper knows all about your numbers.

If you’re doing your books, you should be aware of your profit and loss (P&L) and other data, which is usually not always feasible since you do not possess that skillset. A bookkeeper, on the other hand, might be able to help you figure out what’s going on with any strange numbers without stress and why.

#2. Free of headaches tax filing.

This is a legal requirement and a task that every small business owner has to do. A bookkeeper will take care of your tax fund and do the paperwork for you. They will also give you the numbers and fill out the necessary forms and filings. No more waking up at odd hours to work on computers, complete paperwork, or rush to meet deadlines.

#3. They allow you to focus on other essential business tasks by saving you time.

Bookkeeping can be tedious, repetitive, and methodical for someone who would rather run a business than keep the books.

#4. They aid in improving the efficiency of your billing.

You can invoice more successfully and promptly if you get your books in tip-top shape. You’ll shorten the length of your invoicing cycle and get paid more quickly whether your bookkeeper creates an automated system for you or handles manual invoicing.

Benefits of Hiring a Bookkeeper

#1. By using bookkeepers, you may concentrate on your company and well-being.

You can easily outsource many business-related tasks, but your passion and vision must be your own. You can devote more time to the activities that will help your business expand if you delegate the management of your finances to a bookkeeper.

#2. Bookkeepers avoid errors

Errors are expensive, regardless of how innocent they may be. In addition to recording incorrect data, you risk getting caught by the ATO and paying more than necessary in taxes if you underreport any income or expenses. Essentially, a bookkeeper accurately enters all of your figures, bills, receipts, and invoices into your accounting program.

#3. Bookkeepers keep your record current

Cash flow is one of the most critical aspects of managing a successful company. If you don’t have access to your financial data, you must make educated guesses about whether you can afford to expand your company. A bookkeeper is more active in managing your cash flow, while an accountant provides strategic guidance and handles your tax filings.

#4. It is affordable and scalable to hire a bookkeeper.

The cost of outsourcing your bookkeeping is typically lower than managing it yourself, depending on your company’s size, scope, and nature. Since their primary responsibility is to handle your finances and keep your records organized and compliant, an external bookkeeper is not distracted by the ups and downs of your business.

#5. Guidance

Your bookkeeper is knowledgeable about your financial situation and assists you in keeping proper records. They aid in evaluating how to make crucial business choices, such as whether to expand and when to rein things in. In addition, they can help you recognize trends in your sector and seize your possibilities there.

What To Look For When Hiring a Bookkeeper

It can be stressful to hire a bookkeeper. But the procedure might be less intimidating if you know what qualities to look for. Five crucial characteristics to seek in a bookkeeper are listed below:

#1. Knowledgeable about technology

To manage your books, software are becoming more and more crucial. For instance, learning to use QuickBooks correctly now might save you time and money later. Even though many bookkeepers could claim to be familiar with the accounting software you use, they must be skilled in using all of its features.

#2. Logic-based and Future-focused

It should be possible for bookkeepers to study specific data and financial reports and tie that data to your company. Always consider “what-if” situations when planning. For instance, an excellent bookkeeper might be able to identify a place where your company can save costs and make better use of its resources.

#3. The Work Must Be Enjoyable

Make sure the person you are hiring likes dealing with statistics. Workers’ performance typically degrades if they are dissatisfied with their career path. Additionally, people may consider bookkeeping jobs as a short-term means of achieving their goals. Employers should look for a dependable long-term bookkeeper because they deal with sensitive information daily.

#4. Dedicated to detail

A professional bookkeeper must be meticulous and pay close attention to everything. For instance, your bookkeeper must be able to keep track of the customer, the terms of the sale, and the appropriate way to register and document the sale whenever you make one.

#5. Has a working knowledge of taxes.

Although bookkeepers don’t need to know every word of the Internal Revenue Code, it would be advantageous. For instance, they should understand the distinction between an income statement and a balance sheet.

Hiring a Bookkeeper Interview Question

#1. What exactly does the bookkeeping work entail?

Although the answer to this question might seem straightforward, bookkeepers’ services vary greatly. Your needs will also change based on your personal abilities and the volume of work your accountant handles.

Some bookkeepers are in charge of management accounting and can look at financial numbers, while others can only enter data.

#2. Are they certified and registered?

Some bookkeepers may have a degree in accounting, a diploma, or even be Chartered Accountants or CPAs.

Depending on the country, different qualifications and registration requirements apply. Make sure to find out about your bookkeeper’s credentials and whether they are authorized to lodge.

#3. What degree of expertise do they possess?

Your bookkeeper should handle your finances correctly and talk to you in a way that doesn’t take up too much time. You don’t want to spend extra to clear up a problem at the end of the fiscal year.

A professional bookkeeper has to put together a set of financial procedures that they always follow to ensure that transactions are handled correctly.

#4. In terms of delivery and reaction timeframes, what can you anticipate?

The fact that bookkeepers sometimes take a while to reply to emails and don’t always do their work on time is a widespread gripe about them. Find out what you can anticipate from them each week or month and how quickly you can expect them to respond to your questions.

#5. How well-versed are they in your business?

A significant learning curve will occur if your bookkeeper is unfamiliar with eCommerce companies.

Ask them if they have any other eCommerce clients (past or present), and then ask them to give you a few examples of typical bookkeeping problems in your business and how they would handle them.

Is Hiring a Bookkeeper Worth It?

Yes, although you may believe you can save money by doing everything yourself, hiring a professional bookkeeper will really result in greater savings. This is due to the lower likelihood of human error, ignorance, missed deadlines for filing taxes and payments, as well as a delay in accounts receivable.

How Much Should You Pay Someone To Do Your Bookkeeping?

Depending on the volume of transactions and the complexity of the services needed, the average monthly cost to outsource your bookkeeping needs is between $500 and $2,500.

Is a Bookkeeper Cheaper Than an Accountant?

Yes, generally speaking, bookkeepers bill less than accountants for their services.

How Do I Know If I Need a Bookkeeper?

It would help if you had a bookkeeper when:

  • You can’t focus on other areas of your firm, such as selling, creating, and expanding, since you’re too busy classifying transactions.
  • You haven’t yet sent out client bills or collected on accounts receivable.
  • You don’t have a system or database to keep track of your invoices and receipts.

Do I Need a Bookkeeper Or an Accountant?

Most young businesses will probably speak with an accountant at some point, but they won’t hire one until they’re a little bigger. Therefore, even though a bookkeeper would be necessary from the start but an accountant may not, and you would eventually need to hire one.

When selecting a bookkeeper, what is the essential quality you need to check for?

On-the-fly account balancing and error detection should be skills they possess. They should be able to produce timely, precise, concise financial reports. A bookkeeper should also understand proper credit usage during low cash flow.

What is the significance of having my bookkeeping done by a third party?

The advantages of hiring a pro to handle your bookkeeping are numerous. Preserving the integrity of your books ranks first among these advantages.

Conclusion

This article successfully discussed what it means to hire a bookkeeper and some other things you should know. I hope this article was helpful.

References

0 Shares:
Leave a Reply

Your email address will not be published.

You May Also Like