Chances are, you started your business because you’re passionate about the products or services you offer – not to focus on bookkeeping.
But what does a bookkeeper actually do and when should you consider working with one?
“No matter how small the company, hiring a bookkeeper to come in at least part-time is a must"
Marley Majcher, author, But Are You Making Any Money?: Stop Being Busy & Start Creating Cash
work on your business,
not in your business.
When most people begin their business, they focus on the passion – the whole reason they set out to be an entrepreneur! But very quickly, reality sets in and they find themselves also becoming a self-taught bookkeeper.
The obvious downfalls of maintaining your own books is the opportunity cost – the time you should spend building your business is spent learning and performing bookkeeping tasks. Time is a scarce resource, and as a busy entrepreneur, you should be utilizing every moment to building and enhancing your business, not learning new tasks.
Another factor to consider is accuracy. Try as you might, it is difficult to stay on top of the newest CRA legislations and the impacts it has on record keeping. Without a dedicated bookkeeper, it is likely your books will contain errors that may have severe consequences on your business’ finances in the future.
In business structures where there is more than one owner, a conflict of interest may become a factor. It is unlikely any partner may intentionally set out to create inaccurate records, but working with a bookkeeper ensures unbiased documentations.
Every business operates to generate a profit, therefore it’s paramount that costs are kept to a minimum. Furthermore, bookkeeping is a maintenance activity, meaning it does not generate any revenues. Therefore, when considering working with a bookkeeper, it is important to reflect on the costs of outsourcing vs hiring. Click here for more on that.
So How can a bookkeeper help?
A professional bookkeeper is trained to use the same financial recording methods as accountants. This saves your accountant valuable time at year-end and in turn, saves you money!
But what exactly do they do and how can they help take the burden off you?
In the simplest of terms, a bookkeeper looks at all the receipts, invoices and other transaction details of a period and accurately records the information into an accounting software to produce financial statements. Easy peasy, right?
But there’s much more to bookkeeping than just recording daily transactions!
A professionally trained bookkeeper will also be able to provide additional services such as:
- financial statement analysis
- budgeting
- rescue work (cleaning up the errors made in the books by inexperiences staff)
- payroll services
- training
- industry benchmarking
- day-to-day support
- and more!
breathe. focus.
build. succeed.
When you’re ready to move ahead and work with a bookkeeper, there are just a few important details to consider.
Training & Certifications
Currently, the Canadian government has not created or enforced any mandated certification process for bookkeepers, meaning just about anyone can purchase accounting software and advertise themselves as a bookkeeper. Therefore, it is important to ensure the individual you are speaking with has voluntarily completed a recognized certification process. Try to align yourself with a Certified Professional Bookkeeper, a national certificate offered through the Institute of Professional Bookkeepers of Canada (IPBC) to ensure competency, professionalism and commitment.
Software Knowledge
There are numerous accounting software platforms available on the market and they will all likely be sufficient enough to ‘get the job done.’ But when it comes to your potential bookkeeper, look for one who is certified in the software they’ll be using to manage your books. The major software companies, such as Quickbooks Online and Xero, both offer training and certification program available for all bookkeepers.
Processes
In order to remain consistent, accurate and efficient, bookkeepers should have an established process they use for each situation. Typically, a bookkeeper will develop a checklist of items to ensure the same steps are performed month-to-month, task-to-task, for every client. When asking about this, don’t look for the fine details, instead, be on the lookout for clues that this individual seems to improvise or follows strict internal controls.
Fees
The standard market practice is to bill at fixed, value-based packages, rather than hourly. It is important you weigh the pros and cons of both and choose the method that’s right for you.
Hourly rates are more flexible in that you can choose the amount of hours you are willing to pay. However, speed plays a big factor in hourly pricing. An hourly-paid bookkeeper may not work as quickly as they can in order to increase their costs. Alternatively, they may work too fast and unintentionally miss something.
Alternatively, fixed pricing allows you to easily plan and budget for your monthly bookkeeping expenses with no surprises. This allows you peace of mind, knowing the services you agreed to are being provided each and every month, even if there are slight changes within your financial transactions. Many bookkeepers will offer a selection of packages with different features to create the ideal pricing point for many businesses.
http://www.theboostup.ca/potential-client/Visit our What to Expect as a Potential Client for the steps to get started with us!