From personal training to pedicures—when you provide your clients with one-on-one service, they come to expect your utmost attention.
But being in business isn’t just about putting in face time with your clients. As the owner, it’s up to you to manage the nitty-gritty administrative tasks that keep operations running smoothly, too.
When paperwork and managerial duties take up too much of your time, your relationship with your clients can suffer. Bookkeeping is one of those administrative culprits that distracts from client service. It’s confusing, time consuming and most entrepreneurs can’t stand the task.
One way to save time is by outsourcing your bookkeeping. And once you’ve made this decision, it’s time to hire a bookkeeper. Before you make the leap, however, you likely have a few questions like: When exactly should I hire a bookkeeper? Should I bring someone in-house or hire a remote worker? And where do I even begin the search for a bookkeeper?
In this guide, we’ll explain how to find and hire a bookkeeper that’s right for your needs—and how you can put them to good use in your business.
What does a bookkeeper do?
Before you hire a bookkeeper, it’s important that you’re clear about what they do and how they’ll help your business.
Think of a bookkeeper as the go-to person for tracking your business’s financial activity on a day-to-day basis.
A qualified bookkeeper can:
- Prepare your financial statements each month, including Profit and Loss and Balance Sheets.
- Track the money entering and leaving your business.
- Categorize expenses so you can monitor cash flow and see how your business is performing financially.
- Compile accurate financials that help you (and your accountant) file your business taxes.
Occasionally, bookkeepers also handle other administrative tasks like invoicing, accounts payable and payroll.
What’s the difference between bookkeepers and accountants?
Bookkeepers and accountants go together like peanut butter and jelly. It’s good to have just one, but when they work together, magic happens.
While a bookkeeper manages your day-to-day financials, an accountant helps with long-term, bigger-ticket items, including tax returns.
For example, if you run a gym, your bookkeeper delivers monthly financial statements that record how much you’ve earned (e.g. from memberships, drop-ins and merchandise), and how much you’ve spent in business expenses (e.g. rent, wages and other operating costs).
At the end of the year, your accountant takes your business’s financial statements and uses them to prepare your taxes. Your accountant might also use the information recorded in your financial statements to help you plan for the years ahead.
For example, if you know you’ll need to buy new gym equipment soon, your bookkeeper can record the expense when it happens and show you how it affects your assets. Meanwhile, your accountant can help you plan how you’ll depreciate the expense over time.
These are just a few examples. For a thorough rundown, check out our article The Difference Between Bookkeepers and Accountants.
This is the first article in a three-part series. Read the other blog posts here.
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