8 Signs You May Need to Hire a Bookkeeper

Many business owners start by doing the bookkeeping themselves as there aren’t many transactions, and it saves money. However, as the phone begins to ring more often, you get more emails, and you get more customers, the bookkeeping task gets pushed to the end of the to-do list and starts to fall behind.

When it becomes unclear what the bank balance is, where money is being spent, and what tax deadlines are being missed, it may be time for some help.

Here are 8 signs that may indicate it’s time to hire a bookkeeper.

1. You spend too much time bookkeeping

Bookkeeping may be easy when you start your business and take little time out of your day. However, as your business grows, so does the number of transactions on your bank and credit card statements.

Add on the business expenses you pay for personally, and your bookkeeping starts to get out of hand.

Once you’re spending too much time on bookkeeping, it’s diverting your focus from what’s essential in your business. This should be the point where you either outsource your bookkeeping or hire a bookkeeper.

2. You don’t have confidence in your bookkeeping skills

You started your business to solve a problem, which probably didn’t include doing your own bookkeeping.

Lacking confidence in your bookkeeping skills means that the bookkeeping probably has errors and is not done regularly.

Inaccurate books mean you don’t know how your business performs throughout the year.

When you hire a bookkeeper, it means you can refocus your energy on the parts of your business you have expertise in, and you’ll have accurate and up-to-date bookkeeping.

3. You’re constantly playing catch-up with your paperwork

Do you have boxes of receipts and bank statements from the past several months that need to be entered into your bookkeeping program? This is probably due to focusing on revenue-generating tasks and a reluctance to spend all that time catching up on your bookkeeping.

By not keeping your bookkeeping up to date, you can’t:

• See how profitable your current period is.
• Compare the current period to previous periods.
• Make informed business decisions with up-to-date financial information.

If you’re at this point, you may want to hire a bookkeeper to get you back on track and keep your bookkeeping up to date.

4. You have to answer too many questions from your accountant at tax time

I’m sure many business owners can relate to this one.

You either never got around to doing the bookkeeping or did it incorrectly. Then, you hand it off to your accountant to get your financial statements and tax return prepared, only to receive a massive list of questions from them about your bookkeeping.

Suddenly, you have a list of questions you need to answer and probably don’t know the answer to many of them because the transactions happened months ago.

Some information they may ask about are:

• What were uncategorized transactions for, and were they business or personal expenses?
• Bank statements, credit card statements, or receipts that are missing.
• Any business expenses that you paid for personally that still need to be recorded in the bookkeeping file.
• Whether cash withdrawals from the bank were for business or personal expenses.

Leaving bookkeeping to the end of the year means you are likely digging around for information and searching for answers.

By doing your bookkeeping regularly, you can deal with these questions throughout the year and avoid all this additional work at tax time. So then, when you hand off your bookkeeping file to your accountant, it’s a much easier process for both of you.

5. You are missing tax deadlines

If you have to pay GST and source deductions for your business, you’ll need up-to-date bookkeeping to know how much to pay.

Missing these deadlines can be costly, with interest and penalties charged by the CRA, which are not deductible for tax purposes.

A good bookkeeper will have your books up to date so your GST and source deductions will be filed on time, and you will know how much to pay.

6. Your cash flow is unclear

A cash flow statement allows you to see if cash has increased or decreased each period.

A bookkeeper keeps your accounts receivable and accounts payable accounts up to date so you can see where customers are late in paying, which vendors need to be paid, and which aren’t due yet.

This provides a clearer picture of your cash flow so you can better understand where your money is coming from and where it’s going during the month.

7. You don’t have a clear financial picture of your business

If your bookkeeping is piling up, you probably have no idea whether your business is profitable. When your bookkeeping doesn’t get done, your books are frozen in time and useless to you today. You can’t see how much money you’re earning, how much money you’re spending, or what your profit margins are.

So, if there are issues that you need to attend to, you won’t see them until the bookkeeping is done, which could be months, and then it will be too late.

Don’t let this happen to you!

Having a bookkeeper that can keep everything up to date means you can identify issues when they happen and fix them so they don’t drag on for an extended period.

8. You’re ready to grow your business

You won’t be able to grow your business if your bookkeeping isn’t being done and you don’t have accurate reports to tell you if you are on the right path.

If you’re planning on expanding your business, you’ll need to be able to track your finances more closely. Hiring a bookkeeper can help you keep tabs on your spending and income, so you can make informed decisions about where to invest your money.

If any of these sound familiar, consider hiring a bookkeeper. A good bookkeeper can save you time and stress and help you keep your business on track.

Should you hire a bookkeeper?

When you first start out, doing your own bookkeeping may be an easy task that doesn’t take much time. However, as your business grows, the bookkeeping eats up more and more time to the point that it doesn’t get done regularly, and you no longer have any idea how your business is doing.

A good bookkeeper can make your life much easier by freeing up your time by taking on bookkeeping tasks each month so you can focus on your areas of expertise.

Your bookkeeping will be up to date each month and accurately record your business income, expenses, assets, and liabilities.

You’ll have a clearer picture of the financial health of your business so you can make better business decisions throughout the year.

Finally, you’ll have less stress knowing that your bookkeeping is being taken care of, and you don’t have to fit it into your schedule anymore.

Visit our bookkeeping services and plans pages to learn more about how we can assist you in reaching your goals. They provide an overview of our services, including information on the benefits and features of each. Feel free to contact us if you have any questions about our services.

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