When Is The Right Time To Hire A Bookkeeper

When starting a business, you might wonder when you should hire a bookkeeper. There are many new business owners who feel that they are able to complete their company bookkeeping themselves because it is still small. While this might be possible, it is essential that you know when you should hand this responsibility to a bookkeeper.

Do You Need A Bookkeeper Or An Accountant?

When looking at finance personnel, you might wonder whether you need a bookkeeper or an accountant. The truth is that you will need both at some point. A bookkeeper will complete the daily financial record keeping of your business while an accountant is able to analyze the bigger picture and sign off on final accounts.

An accountant can often be hired on a monthly basis to complete some work that you might need. However, you do require a bookkeeper at all times. Many new businesses are able to hire a bookkeeper part-time to start, but if your business grows you need to consider having a full-time bookkeeper.

When You Should Hire A Bookkeeper

Many entrepreneurs state that you should look at hiring a bookkeeper within the first few months of starting your business. You will generally be too busy with other aspects of your business to worry about recordkeeping which could make handling the bookkeeping yourself difficult. After the rush of the initial months, you will want to start looking at how your cash flow works and where your money has been going. This is where a bookkeeper is invaluable.

Any startup can hire a bookkeeper part-time in the first months because there will not be much for them to do. However, as your business grows you will need to look at increasing this. A bookkeeper is in charge of your receipts, expenses and payroll. These are all essential elements of your business that will help your company function correctly.

In-House Or Outsource?

When it comes to hiring a bookkeeper, you need to consider whether you should have someone in-house or if you should outsource your work. Most small business startups will start with outsourced bookkeeping because the amount of work will not justify an in-house bookkeeper. However, once you reach a certain number of employees or revenue over a certain amount per annum, you need to look at an in-house bookkeeper.

When you outsource your bookkeeping, you need to ensure that you are using a reputable company. There are many sole bookkeeper practices that you can use, but you need to ensure that they do not have too many clients. Bookkeepers who have too many clients could become overwhelmed and start to cut corners.

If you are starting your own business, you need to consider hiring a bookkeeper. While it is possible to complete the bookkeeping yourself when you start, you need to hire a professional bookkeeper to ensure that you adhere to financial regulations. Hiring a bookkeeper is essential to good recordkeeping and will lower the costs associated with using an accountant. To learn more about bookkeeping please visit bookkeeping.com

What’s The Difference Between a Bookkeeper and an Accountant

While the terms of bookkeeper and accountant can be interchanged to a certain degree, they really shouldn’t be. A lot of bookkeepers actually get their start as a data entry clerk or an entry level bookkeeper for a smaller scaled business. Through experience they are able to grow and become the go-to for daily financial recording. Because of this, they are essentially someone that keeps and manages the books and retains various documents for records.

Once a bookkeeper becomes experienced, they may eventually move up into an accountant type of role where they are able to expand their job duties and responsibilities. An account then can focus on a variety of things including reporting, analysis, processes, and even advice. In the role, a lot of the times these two end up working together in some capacity. Whereas, the bookkeeper typically works as a manager that glues the accountant and the business owner together.

Both of these job titles can gain certification if they choose to through various organizations. Because neither title actually requires certification, it is not always to be expected for someone to have it. Because of this, it is important to know and understand the certifications and qualifications someone has prior to making your hiring decision.

How Do You Figure Out Whether You Need a Bookkeeper or an Accountant?

If you are stuck trying to figure out which one you actually need, you are likely going to want to take a good look at your business and your objectives. A lot of the times it is going to solely rely on your own industry and the level of expertise that is required to handle the books for your business. You want to not only figure out what industry your business is in, but you also want to look at and consider the number of fixed assets you have and how much inventory you have. Along with this, you should factor in the amount of employees you have, how complex your organization or business is, and whether or not you are going to be needing personalized advice. If you are a small business with very little requirements or needs, you are likely going to need nothing more than a bookkeeper. Whereas, if you are a large organization or business with a lot of employees and a large amount of inventory, you will want to hire a fully fledged and certified accountant professional.

Overall, there are a variety of differences between the two. The main difference is likely to be the level of certification, experience, and knowledge of each. The more experience one has in the industry, the more likely they are going to have ascended to accountant status. Whereas, a brand new person to the industry is likely going to begin as a bookkeeper. Therefore, you will want to figure out which one your business will require and base your hiring decision off of your own individual needs as an organization or a business.