A common question among creative entrepreneurs when it comes to bookkeeping is, when is it time to hire a professional to take care of it for you? Like most things in the small business world, there is no hard and fast rule, but here are a few things that you should think about when you’re contemplating making the leap.
Do you love bookkeeping?
We all started our own small businesses so that we could do something we are passionate about. As small business owners we wear ALL the hats; CEO, CFO, bookkeeper, social media expert, copywriter, web designer, technical support, etc. As you grow, you should be thinking about which of those roles aren’t exactly your cup of tea. Start handing them off to someone you can trust!
Do you have a good grasp on the basics and/or are you willing to dedicate your time to really learning them?
Bank reconciliations, chart of accounts, balance sheet, bad debt, equity, revenue… does it sound like I’m speaking a foreign language? These are real terms and they are important to understand so that you can get a better grasp on your business’ financial health. A great bookkeeper will not only keep your books in good order, but they will help you understand the numbers so you can make savvy decisions when it comes to your business.
Are you confident that you are recording things correctly?
Major props to you if you are even attempting to keep your books straight, but if you’re not doing it correctly you’re just spinning your wheels. An up to date set of books can be really informative, but only if it’s accurate.
Are you able to keep your books up to date?
Throwing everything into a shoe box and waiting for tax time to roll around to sort it all out is certainly one way to do it, but just the thought gives me major anxiety. You can learn a lot about your business when you keep an up to date set of books. Not only that, but you will minimize costly mistakes like forgetting to collect payments from clients or overpaying on an account. Also, how confident are you that you are catching all your business expenses if you only look at them once quarter (or worse, once a year)?
How much time are you spending on your bookkeeping tasks, and could you be using that time to generate more revenue for your business?
If you answered “zero hours” then we’ve got a bigger issue so let’s assume you are keeping your books up to date in a timely manner. How much time do you spend doing that? If you put that time back into your business, could you generate more revenue?
I’m going to go out on a limb and say that it’s likely hiring a great bookkeeper will most likely pay for itself and, given some time to learn your business, will actually start increasing your profits. So tell me, what is holding you back?