Hiring a Bookkeeper for a Small Business (Benefits, Tips, Considerations)

Running a small business is difficult, especially when managing your financials. You can handle your bookkeeping in the early stages, but the benefits of hiring a bookkeeper become clear as your business grows. Not only will this help you get organized, but it will also save you time and reduce stress. In this article, we’ll explore the benefits of hiring a bookkeeper for a small business and offer tips on how to find the right one for your company.  

If you’re ready to get your small business financials in order, Haven can help. Our accounting services for small businesses can help you manage your books and get organized so you can focus on growing your business.

When Should You Hire A Bookkeeper For A Small Business

39% of small business owners work over 60 hours per week. That’s a lot of time. And if you’re like most folks, you’re probably not tracking your time to see how much you spend on bookkeeping. Discover that your time is worth more than you think. You’re not here to scare you into hiring a bookkeeper. 

But do you seriously want to consider how much your time is worth? If you’re spending tons of time on bookkeeping, it’s probably hurting your business. You’re either overworked and heading for burnout, or your company suffers because you’re not focusing on the right things. 

Calculating the True Cost of DIY Bookkeeping

It’s time to get out of bookkeeping hell. Start by tracking how much time you spend per week on bookkeeping. Then, using an online calculator, determine how much your time is worth and how much you spend on bookkeeping per month. 

Compare your salary as your bookkeeper against the price of professional bookkeeping. Once you treat the time you spend on bookkeeping as an actual expense in cash, you’ll have a better idea of whether you should keep doing it.

Benefits of Hiring a Bookkeeper for a Small Business

When you hire a bookkeeper, you’re investing in the accuracy of your business’s economic data. A bookkeeper tracks your financial transactions, posting them to the appropriate accounts to keep your records current. 

This meticulous process ensures clear visibility into your business’s financial health. If you’re facing a tax audit or a business valuation, your organized records will make the process much easier. A bookkeeper also prepares your financial statements so you can focus on running your business.  

Compliance With The ATO: A Stress Reliever for Business Owners  

A bookkeeper helps ensure your business complies with ATO regulations. They manage payroll, superannuation, business activity statements (BAS), and other tax-related responsibilities. 

If there’s ever a question from the ATO, your bookkeeper will have the answers. They also help you identify opportunities to reduce your tax burden, such as potential deductions and credits for your industry and business structure.  

Reducing Business Costs: Finding Savings You May Overlook  

A bookkeeper analyzes your financial data to help identify where you can cut costs. They look for trends in your business’s spending and may uncover unexpected expenses. 

For example, your bookkeeper may find you’re consistently overpaying on a utility bill or subscription service. They’ll bring these findings to your attention so you can make informed decisions to improve profitability.  

Bookkeepers And Your Accounting Software: An Efficient Partnership

When you hire a bookkeeper, they typically work with your accounting software. This allows them to manage your financial data more efficiently and accurately. 

Your bookkeeper will enter data into your software, ensuring it’s timely and correct. They’ll also use the software to generate reports, which provide insights into your business’s financial health. These reports can be customized to focus on areas you want to improve.  

Invoicing  

Your bookkeeper will track and record all your invoices and receipts, including accounts receivable and payable. They’ll ensure your data is entered correctly in your accounting software and follow up on any outstanding payments.  

Data entry

Your bookkeeper will enter data into your accounting software to ensure timeliness and accuracy.  

Expenses  

A bookkeeper can manage all your business expenses, prepare you for tax deduction claims, and record receipts properly.  

Payroll

Your bookkeeper will manage your payroll processes and ensure accuracy and timeliness as well as ATO compliance and super concerns.  

Banking

Most accounting solutions have direct bank feed functionality. Your bookkeeper can manage these directly within your solution by downloading banking information and reconciling accounts.  

Reporting  

A good bookkeeper will also use your accounting software to provide regular reporting. This includes cash flow, budgets, balance sheets, and profit and loss. The business owner then uses these to make better financial decisions and clarify their position.  

Haven: Comprehensive Financial Management for Startups

Let your business take flight while Haven manages your financial runway. Built by founders for founders, we handle everything from daily bookkeeping to complex tax filings, R&D credits that put cash back in your pocket, and fractional CFO services. 

Join 400+ startups who've saved millions in tax credits, countless hours of administrative work, and never missed a filing deadline - all while accessing 24/7 Slack support from CPAs who understand the unique challenges of growing businesses. 

Book a call today to learn how our dedicated team can help you focus on building rather than bookkeeping.

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Steps to Hiring a Bookkeeper for a Small Business

Before looking for a bookkeeper, clarify what you need help with.

• Are you seeking someone to handle basic tasks like transaction tracking and bank reconciliations? 
• Do you need more advanced support with payroll, tax compliance, and financial forecasting? 

Knowing your needs will help you find the right person with the appropriate skills and experience. It will also help you determine whether you need a part-time bookkeeper, a full-time hire, or someone with specialised expertise. 

Your Hiring Options 

Once you know what you’re looking for, weigh your options for bringing on a bookkeeper. You can hire someone in-house, work with a freelance bookkeeper, or use a virtual bookkeeping service. Each comes with its pros and cons. An in-house bookkeeper offers direct oversight and can fit businesses with complex needs well. 

However, this option can be costly and less flexible. A freelance bookkeeper is typically more affordable and offers flexibility. However, they may lack capacity or support during busy periods. A virtual bookkeeping service combines the best of both worlds. These tech-enabled services are scalable and often provide a whole team for the price of one hire. 

For Industry Experience and Credentials 

Find a bookkeeper with experience in your industry or an understanding of your business model. This is especially important for startups and SaaS businesses, where accounting practices can differ. 

Credentials matter, too. Look for someone with an accounting degree, QuickBooks certification, or relevant tax expertise. 

For Tech Compatibility 

Your bookkeeper should be comfortable using the accounting software your business relies on. Whether that’s:

• QuickBooks
• Xero
• Gusto

A customized solution, find someone who can seamlessly integrate into your system. 

Communication and Responsiveness 

Accuracy is a given when it comes to bookkeeping. But good bookkeeping also means good communication. Your bookkeeper should be easy to reach and willing to explain things clearly. This is especially important during tax season or when you have urgent questions about financial reports. 

Trial Period or Project Engagement 

If you’re unsure about committing long-term, consider starting with a trial period or project-based engagement. This gives you time to assess working style, accuracy, and responsiveness without entering a contract.

Pricing and Service Scope 

Before deciding, understand what’s included in the service. Some bookkeepers charge hourly rates; others work on flat monthly fees. Clarify what services are covered and whether extra charges for support or add-ons exist.

Should You Hire a Bookkeeper or Do it Yourself?

If you’re a small business owner, you likely started your business to do something you love. You also probably don't have a dedicated bookkeeping team. Taking on bookkeeping yourself can help you save money in the short term, but the task will consume valuable time you could use to run your business. 

And the more your business grows, the more complex your bookkeeping will become, making the task even more daunting. Hiring a professional bookkeeper will free up your time so you can focus on what you do best.  

Bookkeeping Gets Overwhelming Fast  

Even if you have a basic understanding of bookkeeping, keeping track of all your financial transactions will become increasingly complex as your business grows. Without proper and timely bookkeeping, transactions can pile up and go unrecorded until the end of a financial period. 

There’s also the risk of making costly mistakes and losing or forgetting key details. A professional bookkeeper will help you stay organized and keep your business audit-ready.  

You’re Not a Numbers Person  

Small business owners are often jacks or jills of all trades. But, rarely, they’re also trained bookkeepers. Taking on the role of DIY bookkeeper means having to track and understand debits and credits, inventory costs and business expenses, invoices, payroll, tax returns, budgets, and how to do double-entry bookkeeping. 

The knowledge and commitment required to manage tasks like these can overwhelm even the most enthusiastic entrepreneur. Professional bookkeepers are trained or educated to handle all your high-level financial details. They can even help you interpret your numbers.  

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5 Best Practices for Hiring a Bookkeeper for a Small Business

1. Hire a Person Who Understands Your Business

Bookkeepers can either save your business or cause costly errors. If you want to hire a bookkeeper for your small business, the person must have experience with companies like yours. Knowledgeable bookkeepers will help you create a financial strategy and ensure accurate records. 

They’ll be familiar with the types of financial transactions your business makes and will understand your industry’s unique financial needs. Ask prospective candidates about their experience with companies similar to yours. They should be able to tell you about their previous clients and how they helped them. 

2. Choose a Local or Virtual Bookkeeper

Bookkeepers are available all over the world. You can hire someone local or opt for a virtual bookkeeper. Both have advantages, but finding someone with experience in your area is essential if you choose a virtual bookkeeper. They’ll need to understand the local tax laws and regulations that affect your business. This is especially important if you operate in multiple states. 

Virtual bookkeepers often use secure cloud-based accounting software to collaborate from anywhere. Look for a candidate who is familiar with the software you use or is open to learning it. If you want to meet in person with your bookkeeper, go for someone local. Otherwise, a virtual bookkeeper can help you as much as a local one. 

3. Check for Credentials and Credibility

You’ll want to verify the credentials of any bookkeeper you’re considering hiring for your small business. Look for certifications from reputable organizations like:

• The National Association of Certified Public Bookkeepers
• The American Institute of Professional Bookkeepers. 

These organizations require continuing education to maintain certification, so you can be sure the bookkeeper you hire will be well-versed in the latest accounting practices. Credentials aside, you’ll also want to check the credibility of any candidates. Ask for references and take the time to speak with their previous clients. You can also search online for reviews or testimonials. 

4. Ask What Software They Use

Today, most bookkeeping is done with the help of software. Before you hire a bookkeeper, ask what programs they use. If you already have a software package you prefer, find out if they’re familiar with it or would be willing to learn it. 

You’ll want to ensure that all your financial information is stored in one place and that you can access it. If the bookkeeper uses a different program, ask if you have administrative rights to their account. 

5. Make Sure They Have Tax Experience

Taxes can have a compounding effect on your income over the life of your business. It’s essential to decrease your tax burden in line with tax laws to help you reach your financial goals quicker. Make sure that your bookkeeper is well-versed in all tax law changes. They should guide you in creating the best tax-efficient structure for your company.

Book a Call to Learn More About our Accounting Services (Trusted by 400+ Startups)

Haven is a bookkeeping service that focuses on startups and small businesses. They offer various services to help manage your finances so you can focus on growing your business. Their team includes CPAs who understand the unique challenges of startups. They can help you save money with tax credits and ensure you never miss a filing deadline. 

You can get support from them via Slack 24/7, and they also offer fractional CFO services. 

Join 400+ startups who've saved millions in tax credits, countless hours of administrative work, and never missed a filing deadline. Book a call today to see how Haven can help your business.

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