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Why do I need a bookkeeper?

Running a business is a lot of work!

As a business owner, you often wear many hats, from CEO to finances to business development. The key to any successful business is the maintenance of accurate books and monitoring of the bottom line (i.e. profit). 

A lot of business owners try to manage their own books and fulfill the responsibilities of a bookkeeper. However, this can be an overwhelming and unmanageable task for someone who is already stretched thin. That is why you need a bookkeeper. 

A bookkeeper is someone who can help your business succeed. Bookkeepers are professionals who specialize in the management of business finances, including accounts payable and receivables, payroll, and budgets. They do all the things related to finances that you don’t have the time or perhaps desire to do yourself. 

Keep reading to learn why you need a bookkeeper and how they can elevate your business. 

What is a bookkeeper? 

A bookkeeper is a professional who handles administrative and clerical financial tasks related to your business. This includes recording, organizing and managing financial data and records. These are often tasks that get pushed to the side of the desk by business owners who already have a full plate. However, these tasks are critical to the success of your business and hiring a bookkeeper ensures they not only get done but they get done correctly. 

Common responsibilities include:

  • Recording and maintaining financial transactions 
  • Organizing purchase receipts and invoices 
  • Managing accounts payable and receivable 
  • Processing reimbursement requests and expense reports 
  • Reconciling entries and bank accounts 
  • Maintaining a balanced ledger 
  • Ensuring compliance with legal requirements 
  • Monitoring budgets 
  • Assisting in financial activities, such as payroll, invoicing 
  • Producing financial reports 
  • Generating monthly financial statements (i.e. balance sheets, income statements, and statements of cash flow)
People reviewing tax documents
Photo by Mikhail Nilon

You might be wondering, are bookkeepers and accountants the same? The answer is no – they are actually very different. A bookkeeper is responsible for specific financial tasks related to day-to-day business operations, whereas an accountant is responsible for analyzing data and looking at the big picture to provide financial insights. 

Some businesses have an internal bookkeeper on staff, while others will outsource these services. Regardless of your decision, hiring a bookkeeper is a strategic move that can help accelerate your business.

7 Reasons you need a Bookkeeper

1. Better financial oversight and management

You need a bookkeeper if your business’s finances have become overwhelming and you are unable to manage them efficiently and effectively. A bookkeeper’s main responsibility is to stay on top of your business’s finances and manage your cash flow so that you can focus on running your business.

Cashflow problems can easily arise when accounts receivable and payable are not being closely monitored, especially for small businesses. A bookkeeper will ensure all invoices and bills are paid on time, mitigating issues with cash flow.

Financial oversight and management are important for any business to ensure that informed decisions are being made. A bookkeeper can make sure that you are tracking all the right things from credits and debits to taxes and payroll. Tracking income, expenses and profitability can provide valuable information on the financial health of your business. Bookkeepers are professionals who can ultimately help your business save money as they will keep a close eye on all aspects of finances while maintaining accurate records.

2. Saves time

You need a bookkeeper if you are busy! If you are struggling to find time every day to devote to your business’s finances, it is time to invest in a bookkeeper. A lot of business owners want to have a handle on everything but at a certain point, this becomes unrealistic. For those wanting to grow and expand their business, a bookkeeper is especially important.  

A bookkeeper saves you time by handling all the mundane yet essential financial tasks. They are organized and efficient professionals, meaning real-time information on your business’s finances can be achieved. The best part is that instead of having to input all the information to view this information, you can simply open the file(s) provided by your bookkeeper.  Avoid those late nights in your office trying to manage your receipts and hire a bookkeeper!

Tax time! written on post it note, over tax documents on black table.
Photo by Nataliya Vaitkevich

3. Taxes become less stressful

You need a bookkeeper because taxes can be stressful, especially for a business owner. There are specific filing requirements and certain information that is needed. Hiring a bookkeeper can help make tax season a breeze since they are familiar with the records and forms needed for filing taxes. They can also advise on different strategies when it comes to filing taxes (e.g. filing quarterly vs. annually). It is a lot easier to prepare your tax return when the information is recorded and managed in an organized way. The last thing you want is for tax time to roll around and for panic to set in because you are scrambling to make sense of your books or frantically searching for receipts. 

Hiring a bookkeeper will ensure your business has the proper records and that your taxes are filed properly and on time. In the event of an audit, your bookkeeper will know where to find all the necessary information and can help you navigate the process.

4. Maintenance of accurate records

You need a bookkeeper if you are dreaming of accurate records. You are probably tracking your financial information in some way or another. Most business owners use a combination of Excel and accounting software to maintain their records. There is nothing wrong with using software to track information but it is important that you are tracking and recording the right information. Bookkeepers are familiar with various types of records, especially those required by the IRS, and the type of information that should be tracked. This is especially important if you want to claim deductions and credits on your tax return. A bookkeeper will have well-established processes for tracking said information that they can implement in your business. 

A bookkeeper’s main responsibility is to maintain accurate financial records, which can take a huge weight off your shoulders!

5. Increases scalability

You need a bookkeeper if you want to scale! It is hard to scale your business when you are spending late nights sifting through and trying to make sense of your finances. Hiring a bookkeeper not only frees up your time to focus on running your business but also ensures that you have a strong handle on your financial situation. Scaling requires informed decision-making if you want to succeed. A bookkeeper can help you identify patterns and trends that will help influence the growth of your business. The only way to make informed business decisions is with accurate and up-to-date financial information.

Photo by Karolina Grabowska via Pexels

6. Saves money

You need a bookkeeper if you want to help your business save money. You might be thinking, how can a bookkeeper save me money when it is another expense to add to the books? A bookkeeper can save you money because they take over the responsibilities associated with managing your business’s finances. Take into consideration all the hours you were spending trying to manage this yourself and think about the cost associated with that. The cost of you being the bookkeeper vs. hiring a bookkeeper is likely far greater. Hiring a bookkeeper allows owners to spend that valuable time on other activities that align with their expertise, such as growing the business.

A bookkeeper can also save your business money because they closely monitor cash flow and the accounts receivables and payables. Say goodbye to overdue invoices and outstanding payments.

7. Be prepared to secure loans and funding

Regardless of the size of your business, it can take a lot of work to secure a business loan or related funding. Small businesses are often viewed as “risky” clients, sometimes because they lack adequate records. To secure any loan, you need to prove your business is solvent and that you will be able to pay it back. The process of securing funding is similar, if you want to take advantage of a tax credit or government incentive program, you need to prove that you qualify.

Hiring a bookkeeper ensures that you have all your ducks in a row well in advance. Instead of having to generate the information, you can easily refer to it.

To summarize

A key to successfully running any business is the maintenance of accurate books. Many business owners are experts in their own right but rarely are they experts in bookkeeping or accounting. You need a bookkeeper to take over your business’s finances so that you can focus on the things that are important!

People also ask…

Why is it important to have a bookkeeper?

A bookkeeper is responsible for administrative and financial tasks, including recording, reconciling and reporting day-to-day business transactions. This key information is used to file taxes, apply for business loans and forecast business growth.

How do you know when you need a bookkeeper?

Do you have a pile of invoices and recipes sitting on the corner of your desk? Do you look at it every day and tell yourself today will be the day? Do you dread opening your accounting software? Does your business’s finances keep you up at night? Then you need a bookkeeper. 

It is time for a bookkeeper when you can no longer keep up with the day-to-day finances of your business. It is not advantageous for anyone to pretend that you can do it all. Hiring a bookkeeper is an investment that pays for itself, especially in the long term.

Why hire a bookkeeper instead of an accountant?

A bookkeeper’s role is to organize and manage daily financial data, whereas an account analyzes, interprets and summarizes the financial information that is recorded by the bookkeepers. An accountant depends on accurate information to identify patterns and trends and forecast financial outcomes. Hiring a bookkeeper is more transactional in nature, as they perform very specific data entry-type tasks.

Do you need a bookkeeper if you have QuickBooks?

QuickBooks is a great bookkeeping tool but it is not a bookkeeper. It lacks that personal touch and oversight. QuickBooks will generate and display whatever is inputted, so without the human touch mistakes can easily happen.

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