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. 🙂
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.