Here's How to Know When It's Time to Hire a Bookkeeper
Having trouble with your bookkeeping?
As your business grows, they’ll be a time limit to how long you can do your own bookkeeping. Despite this, there are no rules when it comes to working out when you should hire a bookkeeper.
However, before we take a look at the tell-tale signs of when you should get a bookkeeper, we are going to outline what exactly a bookkeeper does.
What Is The Purpose Of A Bookkeeper?
Essentially, a bookkeeper will keep track of all of the day in and day out transactions of your company.
These transactions are recorded in what is known as a ledger.
When recorded in the ledger, your bookkeeper may use software, or they may write it manually in a spreadsheet. This job is important because they help to put all of your expenses into categories, helping to make sense of the ins and outs of your money.
They can also help to keep your transactions organised. In order to keep your company in top shape, it is important to understand how your finances are doing.
Bookkeepers are great at this, as they are able to create financial statements for you. There are a variety of statements that your bookkeeper can make. These are as follows –
Balance sheets are good for gauging the state of your business at a certain moment in time. They present a variety of assets including investments, property and equipment.
Liabilities can be anything from revenue to debt. Changes in equity can also be generated. The primary purpose of having a liability statement is to exhibit how your capital has gone up and down over a period of time.
Cash flow statements help to see the discrepancy between your business income and how much you are spending. By running these reports, your bookkeeper can help you to keep track of your financial health.
Statement Of Income
A statement of income will show you how much you have earned in either a month, quarter or year and how much you actually paid out in the same amount of time. This can help you to see trends in your spending and income.
While bookkeepers are adept at helping you keep on top of transactions and creating reports, they can also carry out a variety of other tasks. These include:
- Helping you pay tax to government agencies
- Paying out invoices
- Liaising with your accountant to get statements ready for tax
- Keeping track of your company budget
- Looking at company finances to rectify any issues
Bookkeepers can help with many things in your business. With all of this help, is having a bookkeeper for you?
Signs You Need A Bookkeeper
There are some signs that you should be aware of that will make it apparent you need the help of a bookkeeper. Down below are some of the things to keep an eye out for – if you’ve noticed any of these yourself, it may be time to get someone on the books.
Your Bookkeeping Is Taking Up Too Much Time
Depending on how much you develop your business, you may be able to allocate certain tasks to other employees. However, many small business owners find themselves snowed in with a huge amount of work.
If you’re one of these business owners, it is important that you do not waste the time that you have. If you overwork yourself, you could end up burning out very easily.
In order to work out whether bookkeeping is worth doing for your business, see how much time weekly you are spending on it. It could be even a case of you losing a lot of money because you’re spending it bookkeeping when you could be doing other things.
Look at your salary in comparison to the cost it would take to have a bookkeeper. By categorising bookkeeping like an expense, you’ll be able to work out whether you can afford to keep doing it yourself.
You Always Fall Behind With Your Books
If you find yourself falling behind with your own bookkeeping, you may be privy to some harsh consequences. What will happen is that your finances will become more and more separate from the actual state of your company.
This can create problems in understanding cash flow and how your company is actually doing. This, in turn, will affect how you see your business income and what you can do to change it.
With books that aren’t kept up-to-date, they’ll be a lot of bookkeeping you have to go through when it’s time to pay your tax. This will make a difficult time of the year even harder.
With a qualified bookkeeper, you’ll be able to get monthly statements that will help you keep on track. This, in turn, let you know where money is coming and going to.
Your Accountant Handles Bookkeeping
Some business owners will not even look at their books throughout the whole year. After which, they find themselves sending expenses and transcripts over to their accountant.
While this can allow them to file returns retroactively, this will impede making sensible business decisions, as they are not looking at statements throughout the course of the year. This can also be a waste of money.
Certified accountants are more expensive than bookkeepers. By having them handle bookkeeping services also, you may be paying for a lot more than you need to.
Accountants also are not obliged to give you financial records monthly.
Another perk to having a dedicated bookkeeper is the leverage your business records can give you. With regular records, you may be able to gain the trust of investors or have proof of competency if you wish to sell your business.
Do You Need To Hire A Bookkeeper?
In the early stages of your business, it may very well be possible for you to handle transactions without the intervention of someone else. However, as time goes on and your business grows, getting someone on the books can save both time and money.
Thinking that you need to hire a bookkeeper? Get in touch – we have solutions for all your needs covered.