With a growing business, it’s difficult to keep track of finances. Or, if you are looking to sell off your business soon, you know how much valuable clean books are. Therefore, you must always have a good bookkeeper on the job to maintain your books, and keep them clean and updated. Though there are many good bookkeeping options out there, but you just need to know which is the right one to hire.
You’d only need a full-time, in-house bookkeeper if your business has thirty or more employees, or has a turnaround of over a million dollar every year. In the case you don’t need a full-time bookkeeping resource to work from your office, you can either hire a freelancer, or partner with a bookkeeping firm, or adopt a virtual bookkeeping solution. Based on the drawbacks and benefits of each option, you can decide which solution would work the best for your business.
This is by far the most economical solution if you’re not looking to connect with the bookkeeper daily – you allow him to work at his convenience – and, if your finances are simple.
A freelancer will charge you lower than a firm, at a flat or hourly rate, and will decide and dedicate his number of hours based on the complexity of your business, the number of employees in your organization, and the number of transactions that are processed every month.
A freelancer should be visiting your business to collect data and organize any related paperwork at office. If your business has adopted paperless technology, then you should be the most comfortable hiring a freelance bookkeeper. If you’re already using a bookkeeping software, then you must allow the freelancer full access to it so that the freelancer can download or view soft copies of important documents, cutting down on his trips to the office.
However, a severe drawback of hiring a freelance can be time management. You’d be left hanging in the dark if the resource goes off on unplanned leaves or falls sick suddenly. Also, your freelance bookkeeper must be fully equipped to handle year-end computations and bookkeeping which is the busiest season of accounts.
A tiny error by your bookkeeper can result in misinformed decisions on your part, or misreported taxes on the part of your business. Therefore, one must find a bookkeeper who’s sure of his capabilities and has the roadmap planned well. Do not screen your bookkeeper by his number of years of work experience but by his acquaintance with an industry similar to yours, so that he has fair experience in your domain or niche.
A bookkeeping firm works in a very different way when compared to a freelancer. It employs several bookkeepers and allocates them to a project based on their skillsets. A bookkeeping firm is a smart choice if you don’t mind paying a little more than you’d pay a freelancer.
A firm will cost a little more because it covers higher overheads. It may have an hourly or monthly cost structure and its charges will depend on the number of hours dedicated to your work, just like a freelancer’s.
Since many businesses prefer cloud storage, bookkeeping firms are increasingly offering to work remotely with their clients on cloud. This process may require you to become acquainted with the bookkeeping services your choice of firm offers so that you can make the most of them. While it’s a step ahead towards building a paperless work environment, it may also present you with a learning curve. If you’re not open to adopting cloud as a business practice, you may have to request the firm to send their resource over to your office to physically collect paperwork and deliver them again when they’re done. This may however become a cumbersome practice.
Most bookkeeping firms also offer accounting services and may well be equipped to handle your year-end tax filing. It’s a good idea to discuss their accounting solutions at the initial meeting so that you have a clear roadmap ahead.
Unlike with a freelancer, you won’t have to bother about your assigned bookkeeper taking off or going on an unplanned leave. The bookkeeping firm will have your back and provide you an alternate resource who will do your work as diligently as the previous resource.
A firm may employ resources with multiple levels of skillsets, from beginner to professional. It’s good to ask the firm you’ve chosen about the kind of resource they’ll assign to you so that you know the quality of work that is to be expected of them.
You can Google to find a firm that is in your area and that serves your purpose, or ask your colleagues or friends in the same business for leads and references.
A remote bookkeeping solution is an online platform that uses cloud-based software to connect you with their bookkeepers, who will do your books. Though the process is a lot like partnering with a firm, a remote bookkeeping solution will be more affordable because automation will cut down on physical operational costs. Small businesses that don’t have cash-heavy transactions are the most likely to adopt a remote bookkeeping solution.
Such bookkeeping services will typically charge a flat monthly fee based on –
A remote bookkeeping solution is most likely to use a custom app that connects you to your bookkeeper directly. Otherwise, the next most effective communication is through emails. A few bookkeeping services automatically import data about your finances, or you need to scan and submit physical receipts online for the remote service to access the documents.
Since remote firm have multiple employees, they can avoid service gaps, just like bookkeeping firms. Therefore, it’s a better bookkeeping solution than hiring a freelancer on any given day. Remote bookkeeping solutions are also well-equipped to handle surges that are typical of year-end tax filing when books need to be closed.
Since a remote bookkeeping platform will have employees with various levels of experience, it’s good to discuss the quality of work that you can expect from them. They must be able to guarantee the level of quality that you’re looking at and deliver and close books on time.
Though bookkeeping certifications are optional, it’s a good idea to understand what each one stands for before you adopt a bookkeeping solution.
It is a certificate issued by the National Association of Certified Public Bookkeepers (NACPB) and is the more accessible of the two certs between Certified Public Bookkeeper and Certified Bookkeeper. A bookkeeper must have a minimum of one year, or two thousand hours of on-the-job bookkeeping experience, agree to abide by NACPB’s Code of Professional Conduct, and successfully complete a screening test.
A Certified Bookkeeper is approved and receives a stamp of certification from the American Institute of Professional Bookkeepers (AIPB). According to AIPB, Certified Bookkeepers are trained in such a manner that they can act as the “de facto Chief Financial Officer”. A bookkeeper must have two years of on-the-job experience and must sign the AIPB’s Code of Ethics, and successfully complete the exam to be approved as a certified Bookkeeper