Should I Hire a Bookkeeper? 3 Super Tips to Help Your Bookkeeping Decision.
As a business owner (or future business owner), you’re probably faced with multiple decisions daily which can affect your business either positively or negatively. If you’re one of those good business owners, then you’re constantly learning how to improve your business, and a common piece of advice that you’ll hear is not to wear multiple hats. Most business owners start by wearing every hat in the business – you’re the CEO, CFO, CMO, CTO, the secretary, and every other position that your business needs. Yet, smart business owners from the start will implement ways to remove themselves from these duties and delegate tasks to other people until their business is a self-sustaining money-making machine that takes little or none of the business owner’s time.
With that kind of goal in mind, a major question of Accounting Month on this blog for business owners is “should I hire a bookkeeper or do the bookkeeping myself?”. Only you as the business owner can answer that question. Here are three major tips that will help with your decision:
- Do NOT hire an accountant to do your bookkeeping. Hiring an accountant to do your bookkeeping is like hiring a lawyer to do work that a paralegal can do. What will the lawyer do if you hire him to do work that a paralegal can do? He’ll inflate the price of the service and then have his paralegal do it. You can go straight to the paralegal yourself. Likewise, you can go straight to a bookkeeper without having an accountant as a middleman.
- If you hire a bookkeeper, you could easily spend just as much time checking the bookkeeper’s work as you would doing the bookkeeping yourself. That’s why some accountants suggest that business owners do their own bookkeeping or make sure you’re hiring a good one.
- Accounting software makes bookkeeping very easy. The software links to your business bank account and much of the process is automated. All it takes is a short learning curve to learn how to use the software and develop good habits of record keeping (car use log, cash transactions, storing receipts, etc., which you’d have to do whether you hired a bookkeeper or not).
For many businesses, hiring a bookkeeper (or many bookkeepers) becomes more practical when they can hire the bookkeepers as full-time employees of the business. Then the bookkeepers will be trained to follow the systems related only to that business. As long as you’re in a position where your options are to do the bookkeeping yourself or to hire an independent bookkeeper, it may be more practical to do it yourself. Even though one of the best pieces of business advice you’ll ever receive is to avoid “doing it yourself” if you can, bookkeeping is one of the few exceptions. Some small businesses will choose the option of doing most of the bookkeeping on their own, and then hiring a bookkeeper to do audit-type work and some adjustments at the end of the accounting evaluation periods (every month, quarter, etc.). For some businesses this can help reduce accounting costs and save time. It accomplishes both of these objectives since the accountant isn’t doing the work and it supplements what the business owners/employees do instead of replacing what the business does internally.
This article is not written by an accounting professional. Consult with a CPA or other accounting professional before performing accounting for your business.
Future posts on this blog, including how to find a good bookkeeper, how to find a good accountant and step-by-step guides on how to do bookkeeping and use accounting software will be super useful, so check back often and follow us on Facebook and Twitter. If you have any questions (or answers to questions) or advice regarding the topic of this post, leave a comment below.