Guide to Hire a Bookkeeper for the Year 2023
Okay, you are ready to outsource your bookkeeping needs, but you have questions. How many duties should they be doing? How much will it cost to outsource bookkeeping? Do you really need a bookkeeping service, or can you just pay for a software program?
Download Our Free Brochure →This article will assist you in figuring out what your business should do when it comes to bookkeeping, including:
- The reasons to outsource bookkeeping or use a bookkeeping service, as opposed to buying a software program or hiring an in-house bookkeeper.
- The duties a bookkeeping service can do for you.
- What it means to outsource your bookkeeping and how it is done.
- The average amount you should plan to spend to hire a suitable bookkeeper.
Is outsourcing really necessary for your particular business?
Let’s start at the beginning. There are numerous reasons why outsourcing your bookkeeping is a phenomenal idea, one being it is a time consuming, intricate process. But how do you know if it’s what is best for your business right now? Here are some things to think about when deciding.
- If you outsource bookkeeping, you don’t have to do it yourself! This may be obvious, but your time is important and if you could be using it to help grow your business in other ways, hiring out might be what is best for you.
- If you hire a bookkeeper, you can rest assured that your books will be completed accurately and on time, which is essential to a healthy company.
- If you find yourself needing additional funding, or if tax season is upon us, your books will need to be ready to go and accurate. Having a bookkeeper, means your books will be prepared for investors and your accountant, without any stress for you!
Ok, maybe you are ready to push your bookkeeping needs onto someone else, but you still are not sure if you should outsource or hire an in-house bookkeeper or just use a software. Let’s go over the benefits of hiring outside help:
- If you hire a bookkeeper that is outside of your company it allows for much more flexibility. If you ever find your bookkeeping needs increasing, or even decreasing, you can adjust your services.
- It is actually cheaper to outsource bookkeeping than hire an in-house bookkeeper in most cases. An in-house bookkeeper means your paying for benefits and a full-time salary.
- Using a bookkeeping service means you don’t have to do the search and hire process for a skilled, suitable bookkeeper.
What can an outsourced bookkeeper do for you?
The duties a bookkeeper can do for you can vary. When you outsource your bookkeeper/bookkeeping service you can expect they will do the following:
- Import all your financial information. This includes bank and credit card statements, payroll data, your invoices, and more. Note a bookkeeping service does all of this automatically since they connect your accounts and the software you use to them.
- Classify and reconcile your transactions.
- Keep track of all your bills and income yet to be recognized. This usually consists of managing your accounts receivable and accounts payable.
- Stay on top of your books so they are done on time and as accurately as possible.
- Send you your financial statements at regular intervals, whether that be monthly or quarterly. They will contain your income and cash flow statements, and a balance sheet.
- They will be able to explain to you what is in your financial statements and address any concerns or questions you may have.
- They will make sure your books are always accurate and ready, whether that be for tax time, investors, or anyone else who needs to see them.
It is always recommended that you sit down with your future bookkeeper (or service) and decide together what duties you expect to be performed and whether it is something they can deliver for you.
So, you are ready to outsource your bookkeeping, but what does that look like?
The process of outsourcing can vary based on whether you use an independent bookkeeper, a human-only service, or a hybrid (human and software) bookkeeping service. If you choose to work with a service, the steps you will be taking are outlined below.
Step One: Your new account manager, along with you, will link all your financial accounts and the software used in your business with your new service. This allows the process of transferring all your business’ financial information into your chosen service’s software (we use QuickBooks for example) to be consistent and accurate.
Step Two: The bookkeepers your service employs will then work jointly with software to keep track of, classify, and reconcile (compare company records to bank statements) your transactions.
Download Our Free Brochure →Step Three: Your service will then send you your financial statements, which will be precise and orderly, at the end of every month.
You will always be able to have open communication with your account manager. They will assist you and address any questions or concerns you may have.
How much does it cost to outsource your bookkeeping needs?
Unfortunately, this article can’t tell you exactly the amount you will be paying for your bookkeeping needs as this can vary extensively, anywhere from $100 up to $2,000 per month. Instead, we can go over some things to keep in mind when trying to gauge whether you will be paying near the lower end, the higher end, or somewhere in the middle of that range.
Typically, the rate you will be paying will depend on:
- If the service uses software, humans, or a mix of both.
- The number of transactions your business has and the extent of expenses.
- The method of bookkeeping you choose (cash basis/accrual basis).
- The quantity of accounts you need to connect to their service.
- The rate at which you prefer to receive your financial reports.
- The amount of support you receive access to and the quality of that support.
- Whether you choose to have added features such as accounts payable, accounts receivable, handling inventory, etc.
- The extent of how complicated your financials are. For example, the need for special revenue recognition, or if you have multiple entities that need support.
The main thing to keep in mind is the more difficult your business financial situation is, the more costly it will be for quality bookkeeping.
Outsourcing your bookkeeping needs will help your business flourish.
The time you save by outsourcing bookkeeping allows you to focus on other business needs. Up to date and accurate financial books are a necessity for all successful businesses. If the time you spend on bookkeeping is worth less than other things you could be doing to cultivate your business, it is time to hire someone to take that task over for you.