Organized Bookkeeping

Should you Outsource your Bookkeeping?

First, let me start off by saying that I no longer provide outsourced bookkeeping services. ¬†This will not be a biased blog, where miracles of miracles, I suggest you hire someone. ūüôā

Reasons to hire a professional bookkeeper:

  • Education and Training. ¬†Many bookkeepers and accountants have training and education. ¬†Most have at least a two year degree or a four year degree. ¬†Many have continuing education and keep on top of the latest accounting technology trends.
  • Time. ¬†Is your time better spent making money than hacking your way through bank statements and receipts?
  • Bank Loans. ¬†Many banks require loan paperwork to be prepared in a professional fashion. ¬†There might be some accounting quirks that you might want to know about before submitting a loan application. ¬†Many small business loan bankers have mentioned that they can immediately tell if the accounting information is prepared by a non-accountant. ¬†The books are just obviously wrong.
  • Multiple business partners. ¬†I’ve found that multiple business partners are more likely to get in a disagreement if one of the business partners is preparing the books. ¬†Have a third party do some of the work and remove that stress point.
  • Massively behind on everything. ¬†If you are more than six months on even opening bank statements; consider hiring a bookkeeper to get you up to date.

Reasons to do your own bookkeeping:

  • Good understanding on how it works. ¬†I’ve found that people who understand algebra also have a good intuitive understanding of bookkeeping. ¬†Debits and Credits are standins for adding and subtracting from totals.
  • Time: ¬†You have set up bank feeds and are willing to put in time to keep the books up to date. ¬†Many service professionals sell mostly labor and a small amount of parts. ¬†These business types are good candidates for self prepared financials.
  • Organized. ¬†You love checklists and reconcile your bank account everyday. ¬†You probably don’t need a bookkeeper.
  • Computer Saavy. ¬†If you don’t understand computers; you are not going to enjoy spending hours and hours messing around in a computer program.
  • Review your own work. ¬†Most bookkeeping mistakes are rather obvious. ¬†It just takes the courage to review your own work to find them. ¬†For instance, if you know you had $100,000 in sales; but your profit and loss shows $20,000, there is a problem.

Hopefully, this will help you make the decision to outsource your bookkeeping. ¬†It does take some thought about your own capacity. ¬†Remember, that it’s not a sign of weakness to engage a professional; sometimes it’s the smarter decision.