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:
- Flat rate: 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.
- Subscription based: 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.
- Hourly-based billing: 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.
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 operator, 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
Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
How to do bookkeeping
Bookkeeping includes everything from basic data entry to tax prep. Let’s look at the core jobs and see how they’re done.
- How to do bookkeeping
Small businesses can do their own bookkeeping or outsource to professionals. We look at how to find a good balance.
- Setting up a chart of accounts
Stepping up to do the bookkeeping in a new business? You may have to set up the chart of accounts. Let’s look at how.
- How to do bookkeeping data entry
Data entry is the foundation of bookkeeping. Enter the numbers right and you’ll learn exactly how the business is doing.
- How to do bank reconciliation
Humans aren’t always perfect at punching numbers. Bank reconciliation is a way to do quality control on your books.
- How to manage accounts receivable
Many businesses issue invoices, and those invoices need to be tracked. Learn how to manage accounts receivable.
- How to manage accounts payable
Paying bills isn’t glamorous. But they’re debts and need to be dealt with. Let’s look at how to manage accounts payable.
- Creating monthly financial reports
There are dozens of financial reports that you could create. But there are some monthly mainstays that bookkeepers love.
- How to do payroll
If all you had to do was pay staff, it would be easy. But there’s more to it than that. Let’s look at how to do payroll.
- How to prepare tax returns
Tax returns can be hard for small business owners. There are deadlines to make, and rules to follow. Let’s take a look.
- Using bookkeeping software
Whether you do a lot of your own bookkeeping or outsource it all, software can help you save your time and budget.
- Using professional bookkeeping services
If you don’t have the time or confidence to take on bookkeeping, a professional can help. Let’s look at what they do.
Download the guide on how to do bookkeeping
Learn about the eight core bookkeeping jobs, from data entry to reporting and tax prep. Fill out the form to receive the guide as a PDF.