For more than 30 years, I ran a successful business helping self-employed small business owners keep their records. It came about because when I started my accounting practice, I found that a large percentage of my new clients did not understand how to keep good financial records, and many could not afford to hire a bookkeeper.
So I developed an easy system for them to use. It was a win-win because they could keep the accounting records they needed to run their business better, and I could add value to their business rather than getting stuck with being their bookkeeper.
We ended up selling that system in Australia, the USA, Canada, the UK… even Fiji because self-employed business owners worldwide had the same symptoms.
Despite my success in developing and selling a DIY bookkeeping system, I also believe that a quality bookkeeper will benefit most businesses.
Now I said ‘quality’ bookkeeper. A family member recently started her own business and immediately hired a bookkeeper because she realized she could earn more money by hiring someone to do that task while she got focused on marketing.
The issue was that she hired someone who was not as competent as they appeared, but she was unaware of this until I examined her books.
So to complete this series on ‘Essential Finance Skills for Small Business Owners’, we explore how to hire a bookkeeper that will benefit your business.
‘Bookkeeping’ comes under the business pillar of Finance and Administration. It is an essential requirement that if you own a business, you must keep good records.
The government requires you to keep good records to pay taxes and comply with other regulations. But I would argue that the more important reason is that you have chosen to put your life and probably most of what you own on the line to run your own business.
38% of business start-ups that close do so because they run out of money. That is why you must keep good records and the inherent reason for hiring a bookkeeper.
Let’s drill down a little further.
Bear in mind that, more often than not, a bookkeeper is not an accountant. Consequently, you will still need an accountant who understands the intricacies of the tax code and can provide additional analysis to assist you. However, good records will make your accountant’s job easier and minimize the higher costs of a professional.
Let’s take a closer look at the key responsibilities of a bookkeeper.
The first step in engaging a bookkeeper is determining how much work you have for them. This will depend on the size of your business and the average number of monthly transactions. Next, if you or a family member is currently doing the task, how long are you taking, and what else needs to be added? This will then help you decide whether you need a full-time person, a part-timer with a set number of hours per week, or a freelancer.
That decision will influence your options for finding someone for the role. Here are some of the best ways to find the right bookkeeper for your business.
You want the best chance at choosing the right person. Once you have created a shortlist, you need to conduct interviews and get references that you check.
Prepare a list of questions to ask them. You want to ascertain the following:
You need to get and check references.
Hiring a bookkeeper can add value to your business. So, rather than being an expense, it is an investment in your future business success.
Except for the smallest business, having a bookkeeper is a must. If you know little about “numbers in business“, you need someone to take care of this vital aspect of the company.
On the other hand, if you are “numbers-savvy”, great. However, you will undoubtedly find it to be a good return on investment to hire a bookkeeper so you can spend your valuable time on other parts of your business.
This is the final article in this month’s series on essentail small business finance skills. Other articles in this series include:
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Ed Carey, AMG, LLC