The simple answer is YES!
Most small business start out thinking, oh I can do this myself, “it’s easy”, the software is online from multiple companies, I can just get one, and it will guide me through what I need to set up. I won’t have any issues, or If I do I am sure they have great support.
This is why I became a bookkeeper. I had a small side hustle that I needed to track expenses on, and I quickly found out I had no clue what I was doing. The software available guide you to a certain point. I was to small to be able to afford a CPA, so I just did the best I could. This caused issues for me at tax time.
My best advice – when you start your business – Get a bookkeeper! It will save you time, money and headache. Now, let’s get into what a bookkeeper actually does, and why they are vital to your business.
Let me break it down in simple terms. Your bookkeeper documents every financial transaction that happens with your business. A financial transaction could be money in (receivables), or money out (payables/bills). We are record keepers for your business.
Skills that a bookkeeper should possess: Basic accounting knowledge, understanding of accounting best practices, knowledge of GAAP (Generally Accepted Accounting Principals) , data entry skills, attention to detail, proficiency in Excel, high level of accuracy, organizational skills, Associates degree or at least one year of experience, and certification in one of the many accounting applications like: Quickbooks, Xero, Fresh Books (just a few).
Why is a bookkeeper vital to my small business? It makes budgeting easier, assists with tax payments (making sure they are on time, and how much to pay), keeping financial records organized, business analysis (how is your business performing), better decision making, easy financial reporting to investors, Peace of mind, and Freedom. Freedom from spending your time not running your business, but having to do all of the bookkeeping. Your time is valuable.
The number one question I am asked – How is a bookkeeper different from an Accountant? Think of it like this the bookkeeper builds the foundation for the Accountant, we pull together all of the transactions, so that the Accountant can assist the Business with making business decisions. I have worked in the medical field so I compare it to a bookkeeper is the Nurse, and the Accountant is the Doctor. Bookkeeper gathers all of the data, puts it into the systems, so that the Accountant can make sounds evaluations/decisions for the business. It’s a partnership.
Great! – Now you know you need a bookkeeper – what is the average cost? That honestly depends on your business. Most bookkeepers charge hourly or have package deals that include certain levels of performance. A small business a monthly with less than 50 transactions, 2 bank accounts/credit cards, could get away with as low as $400 month this includes the accounting application and receipt management application as well as quarterly reporting. Larger business with payroll and employees could be as much as $2,000 per month. OMG that is so much – really when you break it down an employee doing the same role could cost you more (taxes, insurance, hiring expense, vacation/sick).
What are your thoughts? Do you have a bookkeeper for your small business?