If you don’t have the time or confidence to take on bookkeeping, a professional can help. Let’s look at what they do, how they charge, and how to choose one.
Why would you hire a professional bookkeeper?
There are many good reasons to hire a professional bookkeeper. Here are three of them:
They save you a ton of time.
They help you understand your business finances.
They can take a lot of stress out of managing things like cash flow.
A bookkeeper can also offer support to business owners who feel like they’re working alone.
What will a professional bookkeeping service do?
Bookkeepers will ensure all a business’s accounts are accurate and up-to-date. And they’ll report on those accounts regularly, so the owners and managers know where they stand financially. Plus well-maintained books make it easy for accountants to step in and do their thing at financial year end.
A bookkeeping service may also help you:
fix up neglected accounts and build systems that help you from falling behind again.
recognise and begin to deal with recurring financial issues such as poor cash flow or mounting debt.
identify the things that drive performance in your business (key performance indicators) and set up ways to measure and monitor them.
Bookkeepers increasingly use software to take care of recurring tasks. They will help implement these sorts of technologies, often taking care of setup and training your staff.
What does a bookkeeper cost?
You can find bookkeepers operating at all sorts of price points, and delivering all sorts of results. But there are now some very interesting pricing models that allow you to hire a consultant without taking a huge financial risk.
Three pricing models:
It’s common for practices to charge a flat rate for a specific service, or combination of services. The cost stays the same regardless of the amount of time taken to perform the task. It eliminates some of the traditional uncertainty around hourly billing.
Other practices package services and deliver them for a flat monthly charge. It makes it much simpler to budget for bookkeeping. The service packages are often tiered, so you can start with a lower-priced subscription and move your way up if you like.
Many bookkeepers charge by the hour. It’s hard to anticipate what sort of value they’ll deliver when you first start working together, but it can still be a good deal if you find an efficient operator.
You can check out bookkeepers in your region and your industry in the Xero advisor directory.
What should you consider when hiring a bookkeeper?
You need to know your requirements before you can go looking for a bookkeeper. Have a think about the following:
What type of business do you run?
Service businesses and retailers have different bookkeeping challenges to a manufacturing business. Look for someone with relevant experience.
What type of services do you need?
You may decide to keep some tasks in-house for now. But maybe you also want to have the flexibility to give them everything if you’re too busy.
What type of software do you use?
If you’re committed to a certain type of software you’ll want to find a bookkeeper that also uses it.
- What type of relationship do you want?
Are you looking for an advisor, a trainer, or just a doer?
How to find a bookkeeper?
Once you know your needs you can begin searching for a bookkeeper who’ll be the ideal fit for your business. You’re going to be sharing your financial data with them so you need to be comfortable and trust them. To narrow down your choices, here are some tips.
Decide if you want a sole trader, a small consultancy or a larger company. Do they have enough personnel to deal with your needs?
Do they offer general bookkeeping services, specialise in your type of business or industry, or offer more advanced services and solutions?
Do you want face-to-face interactions or will you be happy with remote service? The services can be delivered remotely but you might want someone to come in to your business regularly.
Go to your networks
Talk to your friends, acquaintances and social networks – they may recommend someone. Your local business association may also give you some leads. Check if there is a bookkeepers association or something similar listed in your area.
If you already have an accountant, talk to them about who they currently work with. If you can find someone they’re familiar with, it can make the relationship between the three of you even stronger, especially if you all use the same software.
Making the final decision
Once you’ve found some likely candidates, ask them some questions:
To what stage do they take accounts: month-end management reports, trial balance, ready for year end?
What are their qualifications and experience?
Are they members of a professional body and do they undertake continuing professional development (CPD)?
Do they have liability insurance?
Have they worked with similar businesses to yours or know about your industry?
How many clients are they handling and can they give you the amount of time and level of assistance you need?
If you’re happy with their answers, then:
contact their referees and talk to them about their experiences with them
- ask your accountant to meet with them and check they’re up to the job
We can help get you connected with an experienced bookkeeper through the Xero advisor directory.
11. Using professional bookkeeping services