Every business needs a bookkeeper. A good one will take care of the day-to-day accounting work and keep your business on track financially. But how do you hire the right bookkeeper?
Helping you with the numbers
As soon as you start a business, you have to deal with numbers. Every business, no matter how small, must keep a record of its every transaction. That includes sales, expenses, salary payments – in fact every movement of money into and out of your business.
Although it’s possible to do this yourself, most entrepreneurs aren’t trained in bookkeeping. So it’s common for businesses to outsource this everyday work.
In this guide we’ll explain why hiring a bookkeeper is a great idea, or even an essential part of doing business. Then we’ll look at how you can hire the right bookkeeper for your business.
Three reasons why you need a bookkeeper
If you’re just starting out in business, you might think you don’t need someone to look after the books. Perhaps you feel that it’s enough to let your accountant sort out the numbers once a quarter or once a year. But there are good reasons for hiring a bookkeeper. Here are three of them:
- They save you time
Unless you already know a lot about bookkeeping, it’s unwise to take on this work yourself. Processing receipts, expenses and payments is only part of the work. They know how to assign expenses to particular clients. They’ll take all the numbers, enter them into your accounting software, and make sense of them. A good bookkeeper knows how transactions should be treated to provide useful business reports. It’s a skilled job, and your bookkeeper will do it much more efficiently than you can. - They understand your business
Because they deal with the day-to-day accounts, bookkeepers have a deep insight into your company’s finances. By sharing this insight with you, they can help you work out where your business should be going. They can flag any issues in time for you to do something about them. A good bookkeeper watches over your finances and helps you steer clear of trouble. - They help manage your cash flow
Accountants provide a valuable service, particularly when it comes to strategic advice, annual returns, and tax issues. But they don’t usually see your accounts every day. A good bookkeeper will keep a close eye on your accounts on a regular basis. This will help keep your cash flow under control, which is vital for business growth.
Understand what you need
Hiring a bookkeeper is like hiring any other professional. First you need to understand your own requirements. Only then can you identify people who will suit the role. Here are some questions to think about:
- What type of business do you run?
For example, manufacturing businesses have different bookkeeping requirements to service or retail companies. - How many transactions do you make on a daily, weekly or monthly basis?
This will help determine how much bookkeeping time will be required. - Which accounting software do you use?
It helps if you’re using online accounting software. Then your bookkeeper can share data securely with you at any time. - Do you require credit control, payroll services or debt collection services to help you get paid faster?
Some bookkeeping companies can handle chasing up the money customers owe you, at a cost. - What are your key dates?
Your key dates will include payroll days, tax return deadlines and scheduled meetings with your accountant. You’ll want your accounts to be accurate and up to date before each of these dates. A key date also revolves around business performance reports. Ask the bookkeeper if they review reports every month to see how the business is performing. One example is a timely and accurate Profit and Loss report.