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When is it necessary to hire a bookkeeper?

Posted by: Eye on Books on 7 Nov 2017 | 1 Comment
Bookkeepers are like the spine of a business. Of course they help you with your everyday accounts and keeping the transactions of your business correct, but there is so much more to them than just transaction keeping. The question is, when is it necessary to hire a bookkeeper?

Related blog categories: Business Guide, Bookkeeping, Startup

 

A bookkeeper's role

A bookkeeper is responsible for recording the financial ins and outs of a business. Furthermore they:

  • Keep a record of sales and purchases
  • They give an input on the overall design of the business financials
  • Organise and take care of the details of the finances on a regular basis
  • Present & record the financial information about your business in a standard way, so that you can analyse the results, and your accountant can easily access it

 

Why is a bookkeeper required?

I'm sure you’re highly passionate about your business and will go to extreme lengths to ensure it is a successful business. However like other business owners you will probably prefer to stick to the tasks you enjoy rather than making data entries of transactions. You didn't go into business to do admin right?

For example, suppose you’re a restaurant owner. You might have:

  • An uncomplicated business model
  • Lot's of customers, which leads to lots of transactions
  • Lot's of sales a day
  • Supplier invoices for food
  • Sales record through cash registers, usually more than one
  • Staff wages to record and pay

That's an extensive amount of information to keep track of and record, furthermore, bookkeeping may not be something up your alley. If you didn’t have a bookkeeper, your day to day transactions would go neglected and unrecorded which means you may lose important data.

What's more your accounts wouldn't be up to date, and you wouldn't know exactly how your business is performing!

This is where the role of a bookkeeper is brought in, their purpose is to make your life easier, and take care of the financials details for you. They can take away the day-to-day recording or receipts, invoices and other bills.

 

The role of a bookkeeper

Bookkeepers are trained individuals they are similar to accountants, but unlike accountants, they record the transactions of a company on a DAILY basis. They organise your companies financial data so it can easily be accessed by you and your trusted advisors. They,

  • Take all your paperwork, supplier bills, receipts, invoices & employee papers
  • Record them in your accounting software, using proper accounting methods
  • Work with you to ensure the numbers make sense and that you know how your business is performing

These people are experts at accounting software but there is something else they may be able to advise you on too, this includes:

  • Tools you can use to streamline your business, such as POS and data entry
  • Payroll services to pay your staff with ease
  • Bookkeeping fixup work, tidying up inexperienced staff mistakes (or even your own attempts!!)
  • Training on how to use bookkeeping software and get the most out of what you pay for

They might also offer day-to-day support for small business owners. Usually a good bookkeeper is your partner in keeping your business financial operations working smoothly

 

The difference between bookkeepers and accountants?

Bookkeeping is highly important to a business. In fact, it plays a crucial role in making or breaking the business. The question arises what sets it aside from an accountant? The two services are in fact different, but work hand in hand.

  • Bookkeepers work on a daily basis, they ensure they are looking into minute details of the business so they can offer valuable advice on the cash flow of the business. They're at the coal face each day, helping with day-to-day operations
  • An accountant on the other hand will look into the work created by the bookkeeper and make minor changes for tax returns and reports. They might be involved in long term strategic tax planning

A business requires both of these experts to avoid any shortfalls or problems. The bookkeeper would work on a daily basis whilst the accountant will handle the work on a long-term strategic basis and offer advice in regards to taxation etc.

 

Your business in detail

Bookkeepers and accountants more or less work with the same numbers. This means they both use the same data of the business to make their reports. They share this information with each other using accounting software, so both of them should be able to access the business' finances online in order to make accurate findings regarding the financial status of your business, if you wish to receive accurate advice.

The bookkeeper is the regular accounts contact for you and is the best person to consider for any questions regarding the finances of the company.

 

At what point would my business need a bookkeeper?

Well, as soon as you get started!!

If your business doesn’t have a bookkeeper at this moment I would suggest you hire one soon. Ideally you don’t want to stack your bookkeeper with months and months of work to catch up on and piles of receipts and payments to go through, do you?

They are the best people to go to if you can’t remember what a certain expense in your bank account was for. E.g. why did I buy more burger buns for the restaurant on 21st July than normal- a bookkeeper will look up into their data and instantly tell you “you hosted a party on that day”.

What's more they free up your time to focus on what you do best, running your business!

 

Finding the ideal bookkeeper

You need to ensure that the firm you hire is completely trustworthy and is competent enough to handle the day to day cash flow of the business. Hiring a bookkeeping firm requires extensive thought and careful consideration.

You may even ask your accountant to provide you with recommendations. After all it’s best if they both use the same software, understand how each of you like to do business which makes correlation much simpler. It is recommended that the software used by both should be cloud based, this means both should be able to access it online regardless of time and place.

Once you have a shortlist you may:

  • Check their work history. Do they have the experience to help you in YOUR business?
  • Size of their team? You don't want to be dependent on one person. Do they have backup to ensure your business runs smoothly all the time?
  • Speak to their other clients - Check out their testimonials
  • See if your accountant and bookkeeper can meet one another to discuss possibilities of working together

You can't just share your business's finances with anyone, you need to make sure the person is trustworthy and will not maliciously use your company confidential information.

 

Get the best out of your business

A bookkeeper's service is crucial to the success of your business. They save you time and money by handling your finances for you. The real-time up to date information they collate can help them offer you new insight on your business.

They allow you to move your concentration elsewhere in the business whilst they focus on the finances.

As we've covered in this guide, a bookkeepers value to small business can't be understated, and they provide services more than simply data entry and compliance. Make sure you get the best out of your business by joining forces with a great bookkeeping firm to help you conquer the business world!

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