Tuesday, March 31, 2015

Do I really need a Bookkeeper?

Do I REALLY need to hire a bookkeeper?
There are many small business in the South Jersey/Philadelphia area that would answer “No” to that question.  Let’s take a look at their reasons and then let me explain to you why EVERY small business should have an outside bookkeeper in some capacity.

Their reason: “My wife/husband (mother, brother, friend, aunt, niece etc.) is going to help me and do it.”
My response: Although the person you put in charge of your books may have your best interest in mind, and may even be really good in math, they may not understand the nuances of accounting and how it can impact your business.  Also is this going to be their full time job or just something they do at night and on weekends to help out?
Their reason: “I can do it myself”
My response: Although many small business entrepreneurs can learn what to do, they usually fall short on either time or understanding of accounting when issues become more complicated as their business grows. 
Their reason: “My business is too small to need a bookkeeper.”
My response: This actually may be “somewhat” true. You may not need a bookkeeper on a weekly or even monthly basis, but EVERY business should have someone looking at their books on a quarterly basis.  You should have accurate records so you can look and evaluate your business to see where you are and where your finances need to be.
Their reason: “I already have an accountant so this is just an added expense.”
My response: Every business needs an accountant.  They are a vital part of your business in keeping your filings with state and federal agencies current. Although you may feel a bookkeeper is an added expense you need to look at how much you are paying your accountant at the end of the year.  Accountants charge anywhere between $150-$250/hour.  You will pay a bookkeeper anywhere between $40-$65/ hour.  Now think, would you really want to pay $200/hour for someone to sort through your receipts and figure out and fix all the mistakes made by your mother (who you have paid $6,000 this year already) or $50/hour to an outsourced bookkeeper that can have everything ready for your accountant so their bill will be significantly less. 

Take a couple weeks to think this over and in 2 weeks I will talk about how to find and hire a GOOD outsourced bookkeeper. 

1 comment:

  1. To give you some real perspective, I too had a small business in Jersey and decided to forgo the bookkeeper. One tiny miscalculation with the taxes, grew month to month to the point I was underpaying taxes. When the IRS sends you a letter, you know its time to get some professional eyes on those numbers before it costs you heavily.