Do You Need to Hire a Bookkeeper for Your Small Business?

When you run a small business, it could be beneficial to hire a bookkeeper. A bookkeeper deals with financial administrative tasks like consolidating records of accounts, processing payments for suppliers, following up on payments that are past due, and more.

Don’t make the mistake of thinking a bookkeeper and an accountant are the same, though. Bookkeepers cannot analyze the numbers, provide financial advice, and prepare tax documents as accountants can. Bookkeepers charge a less expensive hourly rate than accountants too. 

While bookkeepers can benefit small businesses in a variety of ways, there are pros and cons to outsourcing your bookkeeping. So, hiring a professional to handle your financial admin might not be the right choice for you. Let us take a closer look so you can determine whether you should hire a bookkeeper for your business.

The Pros and Cons of Hiring a Bookkeeper

Hiring a bookkeeper comes with both advantages and disadvantages. For example, having a professional on board to handle financial admin tasks gives you a lot more free time to focus on other important areas of your business. But while bookkeepers can be very useful, it’s often enough to use form generators to produce accurate filings.

Take the example of filling out Form W-9. Self-employed workers and independent contractors use the form to provide their correct taxpayer identification numbers to clients. You do not need a bookkeeper to handle such forms when you can create a W9 form online instantly. Let us take a look at the other pros and cons of hiring a bookkeeper for your small business.

Pros include the following:

• Bookkeepers are more experienced in handling records which can lead to fewer errors being made.
• Bookkeepers can show you ways to cut costs and manage your budget.
• By ensuring your books are always accurate, you can avoid financial penalties and ultimately save money in the long term.

Cons of hiring a bookkeeper include:

• If a bookkeeper does make mistakes, the errors become your responsibility, as your company is accountable for things like mistakes and missed payments.
• There could be hidden costs, such as charging fees on top of the bookkeeper’s standard hourly rate.
• There is a greater risk of exposing your sensitive data because your bookkeeper will have access to things like your bank account number and online passwords.

Reassess Your Need for a Bookkeeper as Your Business Grows

Regardless of whether you decide you should or should not hire a bookkeeper, you need to reassess your decision in the coming years. After all, in the early stages of launching a small business, your bookkeeping and accounting needs will be pretty basic.

On the other hand, if your business grows, you need to look at your bookkeeping and accounting systems again. You may wish to hire an accountant rather than a bookkeeper, or you may decide it is better to use accounting and bookkeeping software than a human bookkeeper. Just make sure your business does not get stuck in a rut and is able to change with ease upon expansion. 

Final Thoughts

Whether you need to hire a bookkeeper for your small business is ultimately up to you. Spend time weighing up the pros and cons to help you reach the right decision. And when your company goes through a period of growth, consider your options once again.

The post Do You Need to Hire a Bookkeeper for Your Small Business? first appeared on Feedster.

from Feedster https://www.feedster.com/small-business/do-you-need-to-hire-a-bookkeeper-for-your-small-business/?utm_source=rss&utm_medium=rss&utm_campaign=do-you-need-to-hire-a-bookkeeper-for-your-small-business