Why Do Small And Medium Businesses Hire a Professional Bookkeeper by shbsusa

A bookkeeper is responsible for recording daily financial transactions, updating a general ledger and preparing trial balances for perusal by accountants. They maintain and file requisite documents for taxation compliance. They monitor cash flow and produce financial reports to assist managers in taking strategic decisions. Bookkeepers may also assist in running payroll and generating invoices for your company.

• The books of an ecommerce startup are different from the books of a dentist; try to find a bookkeeper who has worked with businesses like your own before, and has experience in your niche.
• The best accounting software automates a lot of the process in journal entries for regular debits and credits to help eliminate possible errors in data entry.
• Hiring a bookkeeper will help you to avoid becoming one of those businesses.

That means they can access your financials securely online, from anywhere. It lets them share reports about the financial status of your business. As a business owner, it is important to understand your company’s financial health. Bookkeeping puts all the information in so that you can extract the necessary information to make decisions about hiring, marketing and growth.

Accounting Methods

Peter Daisyme is the co-founder of Hostt, specializing in helping businesses host their website for free for life. Previously, he was co-founder of Pixloo, a company that helped people sell their homes online, which was acquired in 2012. Your bookkeeper can put the financials in order and run reports showing how you are doing each month, where the funds are going and how your efforts are paying off . He or she will give you that “big picture” through the numbers being crunched. You want your business name to reflect you as a person and the type of services you provide. Your business name is the first thing that lets customers, clients, competitors and others in the marketplace know about who you are and what you do.

More so, when you hire a bookkeeper, there are fewer errors in calculations and keeping accounts. Administer all accounts payable and accounts receivable of the business. This makes it easy for you to know the state of your accounts, it is also easier to generate financial reports that let you know how you are doing financially. However, ultimately, hiring a bookkeeper is a personal decision and depends on the needs of the business.

Bookkeeper Job Description: Skills, Qualifications And Template

One example of a process that may need to be reviewed is the hiring process. If a business is struggling to find qualified candidates for a position, it may need to review its job requirements or job posting strategy to ensure they are attracting the right candidates. Automating your billing and payment system can save a lot of time for small businesses as opposed to manually creating and sending invoices to all your clients. Once you set up the templates, the system generates and issues invoices automatically, with minimal required input from you or your teams. Because you are so busy, you may not realize that there are outstanding payments from your client base. Any late payments here could infringe upon the cash flow you need to keep your startup humming along.

Moreover, keeping separate accounts minimizes the chance of potential errors occurring, which is crucial for tax compliance. Separating personal and business finances enables business owners to accurately calculate profits and costs, making it easier to file taxes and avoid any penalties or fines. The most obvious reason to keep personal and business finances separate is that it allows business owners to have a clear understanding of their company’s finances.

If so, then you need to hire the services of a professional bookkeeper. Overall, having to hire a bookkeeper for your small business is a smart move. Not only will it help you save time and money, but it will also allow you to focus on other aspects of your business.

AIPB certification requires bookkeepers to have at least two years of full-time work experience and pass a national exam. To maintain the credential, bookkeepers are required to engage in continuing education. Research potential professionals or services before hiring them. Check out their reviews and talk to them directly before making any final decisions. By streamlining tax processes and working with tax professionals can save money. Ensures that you’re not personally held liable for any debts or issues related to your business.

How much is QuickBooks for small businesses?

As a company expands, it will often need to purchase more commercial real estate, acquire more insurance policies, and take out more loans to support growth. Therefore, having a good credit score can help secure approval for these transactions and acquisitions. If you’re considering becoming a bookkeeper, read our guide to learn how to start a bookkeeping business in 2023. We’ll cover everything from the legal side of registering a new business to pricing, marketing and more. One understandable confusion that comes with the topic of bookkeeping is differentiating what bookkeepers and accountants do.

When interviewing applicants, you need to know that candidates have the right skills for the average collection period formula. Open-ended questions and icebreakers are great ways to start a conversation with an applicant. But you have to determine the applicant’s skill level and proficiency with bookkeeping tasks.

According to a Gallup poll, 39% of small business owners work more than 60 hours a week. Use one of our recommended background check companies to make the process easier. Using your job board of choice, you can scan for bookkeepers in your area with the experience you seek. Most bookkeepers should have at least some experience with Microsoft Excel. Use our free Excel test to assess your candidates before hiring. Trusting the financial details of your business with anyone is a big step.

Certified public bookkeeper

You don’t need to worry about your bookkeeper getting sick or leaving on vacation, since your books can be picked up by other other bookkeepers at the firm. There are countless options out there for bookkeeping software that blends a good price with solid features and functionality. For full-time bookkeepers, the average annual salary sits around $77,000, according to Glassdoor. For both sales and purchases, it’s vital to have detailed, complete records of all transactions.

While bookkeeping is more than just copying numbers into a spreadsheet, it is a basic finance position, so you don’t need to look for someone with decades of experience. Many companies have a background check policy to run a criminal background check on all new hires. Xero does not provide accounting, tax, business or legal advice. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided. For your business to run smoothly, ideally you need both people.

They must take 24 hours of continuing education each year to maintain their license. There are no formal educational requirements to become a bookkeeper, but they must be knowledgeable about financial topics and accounting terms and strive for accuracy. A bookkeeper is not an accountant, nor should they be considered an accountant. Accounting and bookkeeping work hand in hand, and although many people refer to bookkeeping and accounting interchangeably, these two operations aren’t technically synonymous. Holly Carey joined NerdWallet in 2021 as an editor on the team responsible for expanding content to additional topics within personal finance. Previously, Holly wrote and edited content and developed digital media strategies as a public affairs officer for the U.S.

Merchant processors, loans, and lines of credit may also be taken into account. Typically, it’s more expensive to hire a firm than a freelance bookkeeper, since firms have higher overhead to cover. When it comes to budgeting for bookkeeping, the difference hinges on whether you hire or manage using software tools. Bookkeeping beginners need quick wins to get started quickly and efficiently.

If you have a paperless office with digitized documents, you may find you’re comfortable hiring and working with a freelancer online. A local freelance bookkeeper should be able to visit your business in person in order to collect and organize your paperwork. As you continue working with them, a flat rate may become feasible, and offer the benefit of a predictable bookkeeping expense in your monthly budget.

Business owners who don’t want the burden of data entry can hire an online bookkeeping service. These services are a cost-effective way to tackle the day-to-day bookkeeping so that business owners can focus on what they do best, operating the business. For business owners who don’t mind doing the data entry, accounting software helps to simplify the process. You no longer need to worry about entering the double-entry data into two accounts. In addition, accounting and finance management tools offer the ability to link to the company’s bank accounts and credit cards.

Do I need to rent office space for my bookkeeping business?

So even if you have accounting software, odds are, you still need a bookkeeper to manage the software, enter data, file reports, identify errors and keep everything current. If you pay vendors late, you may find that essential supplies are cut off. A bookkeeper will keep on top of what needs paying and provide you with a regular payments list. All you will need to do is make sure that you are happy with the proposed payments, check your cash flow, and sign the checks. Do you have more questions about the bookkeeping process for small businesses? Wondering how best to collect and track financial information, deal with expense management, and ensure healthy cash flow for your business?

By this, we mean conducting an in-depth analysis of your business to determine if you need a bookkeeper. Lastly, hiring a bookkeeper will reduce your workload, stress levels and prevent you from burning out. With a bookkeeper in your business, the occurrence of fraudulent acts would be minimal. Thereby preventing you from making financial errors that could destroy your business. While their job roles seem similar, their functions, responsibilities, and job descriptions are quite different. Chances are that you already know all these things, which is why you’re in search of a bookkeeper in the first place.

The next step to take in hiring a bookkeeper is to assess the applicants’ skills and competence. The next step of action is to review various applications to see those that fit the job description. It all depends on your business needs and, of course, the cost and your business budget. However, the big question is, how do you tell it’s the right time. This is why this is a crucial first step to take before hiring a bookkeeper. However, incorporating such trends into your business without proper timing and planning could lead to business failure.