Small business owners are often used to handling many tasks. They may contact suppliers, deal with marketing, monitor sales and respond to customer inquiries and complaints. They may even take on accounting and bookkeeping tasks. However, doing financing tasks yourself may do more harm than good.
A bookkeeper can help a business owner manage day-to-day finances. These experts monitor cash flow from different accounts, bills and invoices and can organize your books to improve money management. We’ll share the pros and cons of hiring a bookkeeper and explain how these financial professionals operate.
A bookkeeper is a finance team member who handles financial administrative tasks related to preparing your accounts and recording daily financial transactions.
Bookkeepers are responsible for consolidating accounts’ books, following up on past-due payments, sending billing reminders, processing payments for suppliers and running payroll. Bookkeepers are a more appropriate choice than accountants for basic financial tasks because their hourly rates are generally less expensive.
A bookkeeper is a financial professional who can handle your business’s money management and save you time, money and headaches. However, allowing someone else to manage your finances can pose risks for your business.
Here are the advantages and disadvantages of hiring a bookkeeper for your business.
Before you hire a bookkeeper, you must understand which type is right for your business. Consider the following options.
Hiring an in-house bookkeeper is ideal if you have a medium-sized business and want to keep track of the bookkeeper’s day-to-day duties. However, this type of bookkeeper requires a steep financial investment. If you hire an in-house bookkeeper, you must pay for all the resources they need, including their salary and employee benefits.
If you only need a bookkeeper to consolidate your accounts once a year, consider hiring a freelancer. These independent bookkeepers usually charge an hourly rate that depends on their expertise.
Large enterprises often use agencies to handle their finances. However, small and midsize businesses can also take this route. The cost of using these agencies depends on the type of service you need.
When you outsource your bookkeeping duties to a third party, that company will set up and train a dedicated team to handle your needs. The outsourcing partner will provide computers with accounting software, voice-over-internet-protocols for billing reminders, office space and more.
Here are some factors to consider when choosing a bookkeeper:
When it comes to accounting and finance certifications for bookkeepers, look for accreditation through the National Association of Certified Public Bookkeepers (NACPB). Bookkeepers with this accreditation have completed an Accounting Fundamentals course and passed the Bookkeeping Certification examination.
To hire a bookkeeper, you may need to pay as little as $10 per hour for basic data entry or as much as $75 for a senior bookkeeper with some accounting expertise. If a bookkeeper is also a certified public accountant, they may charge $150 per hour or more.
While many of the best accounting software solutions can handle bookkeeping functions, some bookkeepers may prefer dedicated bookkeeping tools. Here are some popular bookkeeping and accounting programs to consider for your finance team.
QuickBooks Live Bookkeeping offers basic bookkeeping services for small businesses. The service will assign a team of virtual bookkeepers to your account who will consolidate all your accounts and expenses in real time. You can chat with them, have a video call or share screens. You can also track their progress through the platform’s Live Bookkeeping Hub. QuickBooks Live can also arrange your books in preparation for your tax filing. However, it can’t file your tax documents.
FreshBooks is a popular accounting solution with many bookkeeping tools for small businesses. It can generate invoices and handle billing reminders and financial reports. The software has an easy-to-use interface and integrates with PayPal, Google Workspace, Stripe and other platforms. It also has a mobile app that lets you update and track your books on the go. Read our detailed FreshBooks review to learn more about features and pricing.
You can organize your books and collaborations with Zoho Books on one platform. The software allows you to add your bookkeepers and accountants and monitor them through the platform. In addition to invoicing and billing reminders, Zoho Books can access your bank accounts and payments to organize your expenses. It also allows you to keep an inventory of your office supplies or product stock to know when and how to replenish them easily. You can also request reports, such as profit and loss statements and tax summaries. Our in-depth Zoho Books review has more details about features and functions.
Xero is cloud accounting software that lets you handle all accounting and bookkeeping tasks on one platform. You can check product inventory, save contacts and evaluate business performance through generated reports. It also has a sales tax feature that helps you file your taxes and prepare sales tax returns with automatic calculations. Read our review of Xero for more information on features and pricing.
Kashoo is considered a QuickBooks alternative; it has essential accounting and bookkeeping services suitable for very small businesses. It helps you track expenses and bills, create invoices and generate basic reports, such as income statements and balance sheets. The platform is easy to use but doesn’t offer full bookkeeping features like product inventory and pre-invoice documents. You can access your account through a mobile app for on-the-go tracking.
Jennifer Dublino contributed to this article.