Bookkeeping and accounting can be a challenge and headache for small business owners. Even if you don’t mind doing the bookkeeping, it still might not be the most beneficial use of your time. Small businesses can do it yourself, use temporary employment services, outsource to accounting and bookkeeping firms, or hire a full-time or part-time bookkeeper/accountant. Midsize and larger businesses most of the time need to hire full-time and/or part-time employees to perform their accounting and bookkeeping tasks.
Do it Yourself Bookkeeping
When starting a business, many small businesses are strapped for cash and decide to try to do their own bookkeeping and accounting. Is this good or bad ? If the owner(s) know what their doing, they will save some money and have a good idea of how their business is doing financially. Knowing what your doing not only requires some bookkeeping knowledge; but, nowadays almost always also learning how to properly select and use bookkeeping software such as Quickbooks that is so readily available. That ole saying Garbage In Garbage Out (GIGO) still applies. THe main disadvantadge of doing it yourself is the time involved which takes time away from managing the business. As the business grows and becomes more profitable you probably need to consider other alternatives.
Note: Those selecting this option or currently doing their own bookkeeping may find my free Bookkeeping and Accountng Courses beneficial.
Eventually your business will probably reach the point where keeping your own books requires too much time. Many small businesses find outsourcing to an accounting/bookkeeping firm to be a good solution. Choosing to outsource bookkeeping to a firm can often be the perfect happy medium when you don’t want to do the books on your own; but, you’re also not ready for a part-time or full-time bookkeeper.
Hire an In-House Accountant/Bookkeeper
As the business continues to grow you'll probably want to consider hiring a full-time or part-time accountant/bookkeeper or use a temporary employment service. An advantage of using a temporary service or hiring a part-time employee is that if the indiviual works out you can hire them full-time when the need arises. In other words, you get to "try before you buy". Keep in mind that until you have around 30 employees, you likely won’t have enough work to keep a full-timer busy. There’s also the option of combining an administartive position and a bookkeeping position into one full-time job such as an office manager.
The Benefits of Getting Help
There are some benefits to choosing to outsource your bookkeeping or hiring an employee to handle the task.
- Your time is freed up and you’re able to put more of your energy towards managing and growing your business.
- A knowledgable accountant/bookkeeper may help impliment cost saving measures.
- You have an "expert" to help in making difficult business decisions.
- Your financial reports are timely.
- You hopefully avoid GIGO - Garbage In Garbage Out and your bookkeeping records and reports accurately reflect the financial condition of your business.