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Entrepreneurs and small business owners are good at wearing multiple hats. They’re the marketing department, the production assistant, the CEO, the customer service rep, and much more. If you’ve been in business long, odds are you’ve learned quite a bit about finances (or you want to) and you might have even gotten pretty savvy at handling your books. However, doing it all starts to wear on you eventually, and it can even impact the growth and success of your business. Many entrepreneurs ask themselves the simple question, “How do I know when I need to hire a professional bookkeeper?” 

Need a Professional Bookkeeper

Do I Need a Professional Bookkeeper?

A bookkeeper does the day-to-day, hands-on tasks so you won’t have to. If you’re asking yourself, “why should I hire a professional bookkeeper?”, consider all the tasks they would take care of for you. Make sure new employees file all the right paperwork for the business’s payroll, promptly submit and follow up on invoices, and pay bills. That’s just the tip of the iceberg.

Though you may still be at a point where you can handle all of that, so let us give you the warning signs of when you should finally tell yourself, “I do need a professional bookkeeper, this is too much.”

Here are a few tips on how to know when to stop doing it yourself and start giving it to a professional bookkeeper. If you find yourself nodding your head in agreement with what you read below, let’s talk. We’d love to learn about your business and see if our services would be a good match.

It Might Be Time to Hire a Professional Bookkeeper If. . 

1. Your Books Are Never up to Date

We get that it’s hard to sit down and wade through the paperwork that makes up your company’s finances. But if your books aren’t up to date, you can’t be financially aware of where your business stands. That means you’re operating more on risk than you have to. Knowledge is power. Having your books up to date means you have the information you need to gauge the current health of your business and make smart, data-informed decisions.

2. Bookkeeping and Finances Take Up Too Much of Your Time

Running your business means you’ve got to keep tabs on a lot of different moving parts. We’re always impressed with the entrepreneurs and small business owners we work with; they can manage a lot. But it’s not worth running yourself into the ground and losing your passion for your business. According to a report by Sage, small businesses spend an average of 120 working days per year on administrative tasks. Another study found that a majority of entrepreneurs say the administrative burden of managing federal taxes is worse than actually paying taxes.

If you’re finding that you’re spending more time in areas that you don’t love (say the bookkeeping and invoices) and less time doing what got you started in the first place (customer service or creating your products), then it might be time to admit to yourself that “I do need to hire a bookkeeper”, and hand it over to a professional.

Look online to see what options are available. Be sure to take into consideration pricing and fees. There are many affordable solutions that can help you handle your bookkeeping and taxes for a flat monthly fee. You’ll have a better handle on what it might cost to hand your bookkeeping over to someone else and you’ll also know what you’ll be able to gain from using their services as well. That’s a win!

You don't know what your cash flow is

3. You Don’t Know What Your Cash Flow Is

If you’re still saying to yourself, “I still don’t see why I need to hire a bookkeeper”, there are two words to change your mind: cash flow. Cash flow is how much money you have moving in and out of your business at any given time. Knowing that number means you’ve got a good handle on the success and potential of your business. You’re aware of how much you’re spending and earning, and you’re keeping tabs on bills you need to pay as well as invoices you’ve sent out that need payment.

With a professional bookkeeper keeping track of your finances, you should have access to your cash flow number at any time. That might not be the case if you’re doing your books yourself or if they’re not currently up to date. Not knowing where you stand financially might not be hurting you, but it’s not helping you grow your business. A professional bookkeeper will provide you with financial reports and data that are essential to strategically expanding your business.

If you’re looking for a reason as to why you should hire a bookkeeper, bookkeeping is it. The time and resources saved by constant bookkeeping and detailed records are invaluable.

4. You Handle Your Books at the Same Time You Handle Your Taxes

Here are a few reasons you should consider doing your bookkeeping throughout the year, instead of during tax season:

  • Accountants or CPAs usually charge more per hour than a bookkeeper does. That means you’re paying more for them to do a task that could cost you more than half that much.
  • Books that aren’t up to date aren’t helping you make good business decisions and that means you’re taking more risks in your business. Having quarterly or monthly financial statements at your disposal means you can quickly track how your business decisions impact your bottom line.
  • Accountants who do retroactive bookkeeping don’t always provide you with month-to-month records. These detailed records are often necessary to secure loans, or attract investors, not to mention help showcase the value of your business if you’re looking to sell.

5. Your Sales Have Increased, You’re Busier Than Ever, but You Aren’t Making More Money

It happens more than you might think. Your business is growing, you’re busier than ever, but your net income is not growing or it’s tied up so you can’t invest it back into your business or pay it out to yourself or your employees. If your revenue is increasing but your bottom line doesn’t seem to budge that means you need to increase your profit margins.

The documents and reports that you’d receive from a bookkeeper will help show you where to cut costs so you can make your business more profitable.

For more details about profit margins and other numbers you should track as a business owner, watch this helpful video:

Do I REALLY Need to Hire a Bookkeeper?

The answer is, at the end of all this, it’s up to you. If you feel confident in your skills at managing all of those tasks for your small business, perhaps not. However, we strongly suggest not taking those signs lightly as, if left unchecked, they can leave huge negative impacts on your business. It’s better to ask the question, “Why should I hire a bookkeeper? Is it worth it?” than “Why didn’t I hire a bookkeeper? It would have been worth it!”.

If you have questions or are looking for bookkeeping solutions, we’d love to chat about your business. We’re here to help!

FAQs about Hiring a Professional Bookkeeper

1. Why should I consider hiring a professional bookkeeper for my business?

A professional bookkeeper can handle day-to-day financial tasks, such as payroll, invoicing, and bill payments, allowing you to focus on core business activities. They provide timely, accurate financial records crucial for making informed decisions, improving financial awareness, and managing risk effectively.

2. How do I know when it’s time to hire a professional bookkeeper?

Several signs indicate the need for a bookkeeper:

  • If your books are consistently not up to date, hindering your financial awareness.
  • When bookkeeping consumes excessive time that could be better utilized in core business functions.
  • If you lack a clear understanding of your cash flow, impacting your ability to gauge business success.
  • When handling books simultaneously with tax preparation becomes overwhelming and affects business decisions.
  • If sales are increasing, but your net income remains stagnant, indicating a need for profit margin analysis.

3. What benefits can I expect from hiring a professional bookkeeper?

By hiring a bookkeeper, you gain access to organized financial records, allowing you to make informed decisions, understand cash flow, and track business performance more effectively. Moreover, it can potentially save costs compared to hiring accountants for similar tasks.

4. How can a professional bookkeeper help improve my business’s profitability?

Bookkeepers offer detailed reports that enable you to identify areas to cut costs, enhance profit margins, and reinvest earnings back into the business. Their insights can guide strategic decision-making for sustainable growth.

5. What happens if I delay hiring a bookkeeper for my business?

Delaying hiring a bookkeeper may lead to financial disorganization, reduced awareness of the business’s financial health, missed growth opportunities, increased risk due to inadequate financial tracking, and potential difficulties in securing loans or attracting investors.

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