As small businesses grow and change quickly, small business bookkeeping tasks can begin to pile up. Financial recordkeeping will also increase in complexity as a company evolves and adds new products or services. So when is the right time to hire a full-time bookkeeper? Here are some clues that may help you realize that your small business will benefit from the additional accounting help.
Lack of Understanding
Many small business owners are not accounting experts, and although accounting software programs are incredibly useful when bookkeeping, additional help may also be needed to assist in the more complex tax issues and detailed transactions that may arise. Rather than investing a significant amount of time into understanding the intricacies of accounting, it might be smarter for you to bring in a full-time bookkeeper. A staff member with bookkeeping or accounting experience can ease the burden of financial recordkeeping and decrease your stress level, allowing you to reposition your talents where they are needed.
Everyone is Busy
As a small business owner, you dedicate much of your life to your company. Even with a firm grasp of accounting and finance, you simply may not have the time to manage this critical function. Calculating a quick cost-benefit ratio may help you rationalize the addition of a bookkeeper to your full-time staff. Plus, your employees who have been forced to take on accounting tasks that don't fall within their area of expertise will see an improvement in their work/life balance, as well.
Growth Opportunities Appear Out of Nowhere
Understanding consumer preferences can lead to new opportunities, and the success of a new small business may hinge on its ability to take advantage of changing trends in the marketplace. In the case of a small real estate investment company, for example, a shopping center in an ideal location may suddenly become available for purchase. Similarly, a new fashion company may catch the attention of a large client who requests a significant customized order to be completed on a tight deadline. When capitalizing on these kinds of opportunities means dropping some of the everyday essential tasks, hiring a bookkeeper to cover financial tasks may translate into increased profits and company growth.
You're in a Highly Regulated Industry
Highly regulated industries such as insurance, health care, and financial services often have much more complex accounting processes. Additional compliance reporting for regulatory agencies or stricter internal controls may also increase time spent on bookkeeping functions. To ease the strain of multiple external requests for financial information, a knowledgeable bookkeeper or accountant can maximize efficiency and improve your business relationships.
Your CPA Costs Just as Much
Many small firms ask their CPA to complete basic bookkeeping duties in addition to tax preparation and year-end financial statement reporting. However, CPAs charge higher rates to perform functions that a bookkeeper can easily complete. If your accounting services bills are running high, consider that the national median salary for bookkeepers or accounting clerks is around $35,000. Take a look at local job postings to determine the going rate for in-house bookkeeping staff, and consider hiring an accounting clerk to handle your payables, receivables, and cash reconciliations.
If you're unsure about hiring a full-time bookkeeper or accountant, you can always test the waters by bringing in a professional on a contract basis. Starting a new employee on a part-time basis may also give you a feel for how a new staffing arrangement will work. Often, a little more on-staff help, combined with a strong online accounting program, is enough to make a huge difference in small business bookkeeping.