You own a business?
Chances are that business making money is pretty important to you, right?
Sure, the amount of cash in the bank doesn’t define it, but it will depend upon it to operate.
That means you need someone to keep an eye on that cash.
You need someone to recognise the needs of your business, and provide the relevant financial support.
You need a bookkeeper.
Not sure what a bookkeeper actually is?
(And no clue what they actually do?)
That’s why I’m here.
Read More: Wikipedia on Bookkeeping
In fact, that’s exactly what I said to a client a few months back.
They had just set up their catering business (a vegan food truck, if you must know) when they ran into a problem:
They were making too much money.
“Hold on - how’s that a problem?”
You see, they’d been doing their own bookkeeping up ‘til that point. Small numbers mean small mistakes, right?
So, when those numbers increased dramatically, they were terrified of encountering a great whopping mistake that could cost ‘em.
Whether its facing fines or skewing next month’s budget, any problem was a threat to their business’ livelihood.
They needed a bookkeeper - and I found them one.
2 months later, and they’ve witnessed a profit increase of 39%!
(They really can’t stop making money...)
Fancy seeing these results for your own business? Then it’s time to hire a bookkeeper.
Question is, how can you actually go about that?
This article will take you through:
- What a bookkeeper is
- Whether you need a bookkeeper
- And how to find the best bookkeeper for your business
When it comes to running a business, my clients know what to do.
They’ve perfected their products, streamlined their sales team, and made magic of their marketing over the years.
But whenever I mention anything to do with finance, it all falls apart.
“Sorry, can you explain that just one more time?”
“Wait - what’s accountancy?”
“Do I really need to know about double-entry bookkeeping?”
I get it, I get it - all the jargon and all the maths can get super confusing. That’s why I make a point of going through everything slowly.
Let’s start with the obvious one:
“What is a bookkeeper?”
A bookkeeper is an individual that manages financial data on a day-to-day basis for businesses. They carry out the process of bookkeeping and their data is then used by the accountant.
“Okay, so what’s bookkeeping?”
This is the recording of all financial transactions of a business. This includes purchases, sales, receipts, and payments made by an individual or organisation. Bookkeeping typically involves someone writing in the daybooks and the general ledger.
“Is there a difference between bookkeeping and accounting?”
In simplified terms, bookkeeping is the recording of financial data; accounting is the presentation of it. Bookkeeping is thus considered a part of the accounting process.
Fancy more details?
Here are the duties and responsibilities that a bookkeeper typically takes on:
Accounts receivable and payable
End of year reporting
Streamlining the business process
Training staff on software
Meeting with clients and authorities
Using bookkeeping software
So, we know what a bookkeeper is…
But do you actually need one?
The answer: yes.
(You really do.)
First, let’s consider the benefits of hiring a bookkeeper:
You can finally focus on the business
You know what you do best.
Graphic design? Product creation? Social media?
Whatever it is, your business depends on you to be at your best.
And if you’re busy fiddling ‘round with a calculator, pretending to understand the difference between single and double-entry bookkeeping, you’re not doing your job, are you?
Remember my vegan food truck client?
The boss prided himself on his perfect blend of FaceBook ads and felafel.
But when he did swap the grill for the ledger, it ended up taking way too long to run he numbers, losing efficiency for the business and taking his skills away from where they should be.
When I found them a bookkeeper, he could finally turn his back on the maths and get back to his kitchen magic.
Mmmm… smells like increased efficiency.
You can save on costly mistakes
When my food truck client was trying his hand at bookkeeping, the business was just about getting by.
Well, that was until he filed their taxes incorrectly.
With the pressure of an audit hanging over his head, stormy weather was set to rock their business for a few weeks. Stressed employees can’t work at their best, can they!
Enter their new bookkeeper.
They didn’t have to worry about filing taxes. They didn’t have to worry about not knowing if their calculations were correct.
And they didn’t have to regret not listening in that high school math class.
Bookkeepers have the training under their belt to catch out these mistakes before they slip through the net and bog down your business.
And with less pressure on your shoulders, you can finally do what you do best:
Run your business!
You can save on late fees
Speaking of finding tax filing tough…
I find meeting my own deadlines hard enough.
But meeting deadlines with large sums of money? That is a lot of pressure.
My client had the truck rental to pay on the last day of the month, different suppliers to transfer money to on different days of the week, and their marketing team wanted a cheque bi-annually…
Even without the numbers it’s a lot to take in!
Now add hefty sums and mix with a business just starting to get onto its feet.
Yep - it’s a recipe for disaster!
A bookkeeper, however, can be the cherry on top. Or even, like, just make the whole cake.
(They really are that good.)
No more coughing up late fees for a simple mistake, and no more pacing up and down the food truck worrying if it’s all going to make budget this month.
You can get the financial know-how that your business needs
When you write an awesome piece of content for your blog, or when you conjure up a new recipe for vegan mac ‘n’ cheese, you don’t just keep it to yourself, do you?
You make sure your colleague proofs it for spelling mistakes. And you let your team try the mac ‘n’ cheese to make sure it actually tastes good!
Why not do the same for your finances?
Sure, my client had taken their business on a successful path so far, but when they hired a bookkeeper, they could have that in writing.
Having glanced at a couple of numbers and pulled out a calculator, their bookkeeper could provide accurate insight into the money-side of their business.
The bookkeeper even pointed out what they needed to improve on!
You don’t have to be a finance-whizz to run a successful business. You can hire one, instead.
“Okay, I get it, there’s loads of reasons to get a bookkeeper…
But does my business actually need one?”
I can peddle bookkeepers all I like, but of course there are scenarios where a bookkeeper may not actually be needed.
To help you decide on whether a bookkeeper is the new addition to your business, here are some questions you need to ask yourself:
1. Can you run the numbers?
If you’re proficient in bookkeeping tasks, then why not save on the spend and do it yourself?
The internet is crammed full of online guides for non-bookkeepers.
But even if it's possible for you to do not-bad bookkeeping, it might be very-bad for your business.
Are you willing to spend your precious time on something that can be completely taken off your hands?
Read More: Bookkeeping 101: A Beginning Tutorial
2. Are you up-to-speed with tech?
Terrible at maths? Not so terrible with technology?
Then this is the option for you.
Bookkeeping software is also a popular alternative to hiring a bookkeeper, simplifying complicated tasks and leaving you in complete control of your finances.
However, these options tend to be exclusively for SMEs and startups who aren’t producing numbers big enough to warrant large scale bookkeeping, nor are able to afford a bookkeeper.
Simple finances require simple bookkeeping.
We’ve made it this far.
You’re up to grips with the confusing concepts, and you can bust any jargon thrown your way!
One problem: things are about to get that much more complicated.
Yep - you’re about to realise that there’s a variety of types of bookkeeper that your business might need.
But don’t panic!
I’ve brought together a guide to the kind of bookkeeper your business needs. Having decided on your financial fix, you can then read up on how to hire ‘em.
Bookkeepers for small businesses
Everyone is talking about bookkeeping for small businesses.
Yes - even your Nan.
“Should I do it myself?”
“And what kind of software should I use?”
The reason the internet cannot stop discussing it is because bookkeeping is do-able.
Bookkeeping software is not only optimised for your business, but guides to bookkeeping for small businesses litter the internet.
That being said, even if the more simpler, lower-scale tasks are an option, a bookkeeper still stands out as something you need to consider.
When you’re trying to get your business off its feet, do you really want to spend your time doing maths?
Didn’t think so.
Bookkeepers for medium-sized or growing businesses
Your business is on-the-grow?
Then it's officially time to ditch the DIY.
Software is designed to suit businesses as they chop and change, and can cope with growing numbers until it's time to take on a human bookkeeper.
And given that your business is witnessing an increase in size, sales, and success, you need to account for the increase in maths.
(No pun intended!)
As this software can sync with other business software and is packed full of features, it can easily align with your business as it follows the twists and turns of a growing business.
The easily updatable inventory and stock management features also confirm that this is comparable to having a bookkeeper working with your business every step of the way.
Or, if you don’t have the time, nor the know-how to use this software, hiring a bookkeeper should be on your to-do list.
Remember my vegan food truck client?
Remember how they suddenly saw a rise in sales?
I advised them to plug their numbers into software as it could adjust to their growing business and changing needs…
They gave it a go for a month, but threw in the towel when their sales increased yet again.
“No computer can take on changes this quick!”
But their bookkeeper, on the other hand, could.
Bookkeepers for big businesses
Software can only take big business so far.
Big business means big money - and that means big responsibility!
You need an actual bookkeeper - or even an accounting team - to support your business financially.
You know how I said things were going to get more complicated?
Well, I’ve got more bad news.
There’s more you need to know about.
You see, just like there’s a variety of businesses currently operating in the world of business, there’s a variety of types of bookkeepers, too.
This is a bookkeeping firm comprised of one person.
Despite having certification and the qualifications to be a great bookkeeper for your business, as they have multiple clients, they might be unable to support bigger businesses.
Small and growing businesses should have these sole traders on their radar, however.
They’re experienced, they’re qualified, and there’s more than one of them!
Hiring a bookkeeper - or even a bookkeeping team - from a firm is the option for bigger businesses with large-scale bookkeeping needs.
Alternatively, an accounting firm could also take on this role as most accounting firms have a bookkeeping department.
Fancy a more personalised service for your business?
Then hire a bookkeeper that works as an employee in your business. They report directly to you, and are devoted to your business’ needs.
My catering client was keen to use a firm at first, but I convinced them that an in-house bookkeeper was the way to go.
Given their niche needs and sudden shifts in the course of their business, I thought specific support was necessary. They didn’t need a bookkeeper who would get distracted by their other clients…
They needed help, and they needed it now!
Virtual bookkeepers perform their service remotely, and typically utilise software for your business. They can be either a sole trader, a part of a practice, or be a Virtual Assistant.
This is an adaptable option for many businesses, but suits SMEs best.
It’s been quite a journey, hasn’t it?
You might be exhausted, and your brain might be crammed full of complicated explanations, but we finally made it:
You know everything there is to know about deciding on the best bookkeeper for your business.
Thing is, how do you actually find them? And how do you actually hire them?
Well, I’ve got some good news for you:
This is the easy bit.
Want to use software for your bookkeeping? Download it.
Fancy firm-based support? Start comparing the options, and decide on the price and volume of support your need.
Looking for in-house support?
Pen a job posting, and put it on the web.
Wait for the responses, and review the candidates.
Couple of interviews later, and decide on your new employee!
(Psst - this is what I did to help my client find their bookkeeper...)
What about taking things virtual?
You could try your hand at the steps taken for finding in-house support, merely clarifying that you’re looking for a remote bookkeeper…
Or you could use a virtual assistant agency, instead.
It’s a bit like Amazon for VAs.
Just scroll through the options, and pick the one with the experience and price that suits your business best.
Yep - it really is that easy!
It’s all well and good to shake hands with your freshly hired bookkeeper, but this won’t guarantee that they’re right for your business.
And crossing your fingers and praying that they’ll do a good job is simply not an option.
It’s for that reason that I’ve decided to go the extra step. Just one more mile. Merely a touch more help to ensure you get the best deal for your business.
(You can thank me later!)
Here are our top tips to ensure you find the best bookkeeper for your business:
Take a look at their qualifications
If only bookkeepers came with a stamp of approval… Some way to know if they’re any good at what they do…
Oh, they do?
Keep an eye out for their qualifications to determine if they can work for your business.
The top qualifications to bear in mind include those offered by AAT such as their Advanced Certificate in Bookkeeping and IAB’s qualifications.
I made sure that my catering client’s bookkeeper’s CV was dripping with IAB qualifications. I wanted evidence that they were the top of the class and could adapt to any scenario put down on the table.
Weigh up their experience
Knowing a textbook inside out might look good on paper, but having experience with businesses like yours - and being able to adapt to different ones - is key.
Take a glance at their past work record, and decide on whether they can work for you.
That vegan food truck was gonna get at least 8 years of financial experience - no if’s, and no but’s.
They were following a rocky road, and needed someone who knew how to navigate!
Ring up their references
Enticed by a clever-looking CV?
Want to see the proof in the pudding?
Give their references a ring and hear their verdicts.
Does it sound like your business? Good.
Just say ‘no’.
This is the first thing I do when I’ve picked a few top contenders for my clients.
That’s right - before I have even interviewed the bookkeepers, I interview their references!
Have your accountant meet your bookkeeper
Already have an accountant?
Firstly - check you out!
Secondly - have your accountant and bookkeeper meet.
As these roles overlap, your trusty accountant can provide insight into whether they can suit your business.
And you can’t get better than an industry expert...
Make time for a rigorous interviewing process
If there’s one thing I always tell my clients…
(Apart from floss everyday.)
… It’s that interviewing should be at the core of their hiring process.
I’m talking multiple rounds of interviews. I’m talking phone calls and Skype meetings. I’m talking trial tasks.
If you want to find the best, you need the candidates to prove it to you!
That’s why I suggested my catering client have 3 rounds of interview:
One over the phone to get to know them, a face-to-face interview, and a trial task of some of their bookkeeping for the previous month.
The victorious bookkeeper was the obvious choice by the end of the trial task, proving its importance.
Read More: AAT Bookkeeping Qualifications
So - by now you should know what kind of bookkeeper your business deserves, and how to hire ‘em.
Heck, you even know how to decide on the best of the best!
I think you’re ready.
Now it’s over to you:
What kind of bookkeeper are you hoping to add to your team?
And how are you planning to dispose of your calculator?