Entrepreneurs like to do everything on their own. It makes sense because if you do everything on your own, you will not have to spend your hard-earned money. For most entrepreneurs, it is hard to justify hiring a bookkeeper or accountant; with user-friendly software like QuickBooks, many businesspersons feel that they should be able to do their own finances, even as they struggle to find time and question whether they are doing things properly.
Deciding whether to outsource bookkeeping services is something that entrepreneurs struggle with at one point or another. Even if basic accounting is easy for you, it might take away the time you need to do other things. If you end up hiring an accountant, you will have realized that you were not doing very well on your own.
Do I need an accountant or bookkeeper?
You might actually need both, it does not have to be one or the other. An accountant is necessary for analyzing the big picture for your monetary situation and offering advice. He will then produce important financial documents like profit and loss statements as well as file your company’s taxes.
Once tax season is over, an accountant may also act as your outsourced CFO and offer advice on entrepreneur financial strategies: whether you should secure a line of credit against your receivables when you introduce new products.
On the other hand, a bookkeeper will handle your daily hands-on tasks such as making sure the new employees file the correct paperwork for your company’s payroll, paying the bills, and submitting invoices. He/she also tracks your expenses and assures that each cost has been entered into software like QuickBooks to ensure that your business is ready for tax season.
When to hire a bookkeeper or accountant
Many small businesses should consider outsourcing bookkeeping or accounting services for a while. You can keep doing it until you have at least 30 employees or your revenues rise above one million. However, when you start calling your accountant too many times, you need fulltime help.
If the part-time bookkeeper is spending more than 3 days in the office and still falling behind, you need fulltime help.
Benefits of outsourced bookkeeping and accounting
• More free time – when you get help, you will have more time to focus on other areas of the business. You can start concentrating on making money and planning other strategies.
• Save money by reducing mistakes – anyone can make a mistake, but a professional is usually more careful because he/she has experience. You should cut down on accounting mistakes by hiring an experienced accountant who knows the common errors.
• You pay less – when you hire in-house employees, you pay them full time, even when they are not working. However, you only pay outsourced accountants for the time that they spend working. This is why many businesses are choosing to outsource different jobs – because it is actually cheaper.
• Better ideas – because you are allowing someone else to see how you are conducting your business, you might get some fresh ideas. As long as you find a person that you can trust, you might even get the necessary expertise and insight for your company to perform at a higher level.
• It removes bookkeeping tasks from the office – one of the biggest distractions in the office is the accountants and bookkeepers who buzz around asking questions. When you outsource your bookkeeping services, you will be making your office more conducive for the other employees to work in.
Are you still wondering whether to outsource your bookkeeping services? The above tips will help you to make up your mind.