The information below is summarized from the Entrepreneur magazine article When to Hire a Bookkeeper or Accountant by Eileen P. Gunn
Understandably, small business owners seek to cut costs in every possible way. Pinching pennies until they beg for mercy is absolutely necessary for survival. Entrepreneurs work long hours in part because, in addition to managing and growing their business, they’re forced to do many tasks that large companies either outsource or assign to employees.
One such responsibility that is commonly DIY is the bookkeeping. User-friendly applications such as QuickBooks Online and Xero make it easy for small business owners to maintain their own books. But because they wear so many hats in their business, they often struggle to find time to keep the books updated, and as a result their financial records never present an accurate picture of where the business stands. If their business survives and grows, when they do hire a bookkeeper, they usually discover they weren’t doing as well with the bookkeeping as they thought. This discovery does not indicate they’re bad business managers. They simply are neither bookkeepers nor accountants, and lack the in-depth training and knowledge required to conform to Generally Accepted Accounting Principles (GAAP).
Outsourced or Internal?
Once a small business owner decides to stop doing the bookkeeping themselves, the first question is this: Do I outsource this function, or can I afford to hire an internal employee to handle it? If your bookkeeping workload is heavy enough to fill 6 or 8 hours of every day, you should probably hire a part-time or full-time employee. Freelance, independent bookkeepers and accountants will most likely have multiple clients, and probably won’t have sufficient time to devote to your books. Otherwise, a freelance finance pro may be a perfect fit for your company until it grows. You will want to institute safeguards such as still writing/generating all the checks yourself to avoid theft (more on this in another post).
Bookkeeper or Accountant?
The answer is, both. A bookkeeper typically charges less than an accountant, but is quite capable of executing daily tasks such as setting up bills for payment in your accounting application, generating invoices, tracking expenses, monitoring financial accounts for fraudulent activity, payroll, and account reconciliations. An accountant charges more, but is best qualified to offer strategic advice, produce financial reports that can’t be generated in with your financial application, and file taxes.
Contact me today for more information on how my bookkeeping services can benefit you, or request a quote online.