When a company first starts out, the owner is often a Jack-of-All Trades, doing everything from interfacing with clients, developing product, and keeping the books. Although dipping into different disciplines can be exciting, there does come a time when delegation is necessary. But when should you pull the trigger and for what tasks?
Often, company owners wait to hire a part-time bookkeeper long after the need for one arrives. In fact, “Entrepreneurs who hire accounting help usually discover they weren’t doing nearly as well on their own as they thought they were” (Entrepreneur). This typically results in messy books that results in wasteful spending and a big tax season scramble. While there’s no hard and fast rule to follow when deciding when to hire a part-time bookkeeper, here are 3 signs to look for.
- The amount of time you spend on business finances costs more than hiring a part-time bookkeeper. The time you spend working translates to a dollar amount, even if, as a business owner, you aren’t paying yourself for all your hours. Determine your hourly rate (Glassdoor is a good reference guide) and track how much time you spend keeping your business’ books. If that amount exceeds what you’d pay a professional, you might want to consider offloading that work to someone else.
- You can’t keep your books up to date. Keeping your books up to date enables you to make strategic financial decisions and curb wasteful spending. It also makes tax season less of a nightmare. If you’re struggling to document and track your company’s day-to-day monetary operations, you’ll find delegating the task to a part-time bookkeeper opens the door to unique insight you’ve been missing out on.
- Your accountant plays bookkeeper at tax time. When calculating the dollar amount attached to the time you spend on bookkeeping, don’t forget to include how much you pay your accountant at tax time. Far too often, business owners with disorganized and out-of-date financial records pay their accountants to act as bookkeeper when filing taxes. If you have a bookkeeper keep your financial records up to date throughout the year, then when tax season comes, you’re only paying your accountant to file your taxes, not sort through receipts.
As a business owner, you undoubtedly wear a lot of hats, but, as you grow, don’t put off hiring a part-time bookkeeper– you’ll save more money than you think!