Should You Hire a Bookkeeper for Your Small Business?

As a small business owner, you already have plenty on your plate. During any given day you could be launching a new product, fielding questions for upcoming press, updating your company’s Web site, brainstorming about holiday promotions, answering customers’ emails and identifying new vendors. Tax season is looming and the paperwork pile on your desk is a constant reminder. Should you hire a bookkeeper? Or should you wear one more hat and take on the responsibility yourself?

Are you an excellent record-keeper?

The Canada Revenue Agency (CRA) instructs that business owners have a record-keeping system (preferably electronic) that details all business transactions, and include supporting documents. Do you know the date and amount of all bank deposits? Do you keep vendor invoices and note when you paid them? Are you religious about recording your business travel – down to the exact mile? Have you saved the receipt for the new printer you bought for your home office? If you answered an emphatic yes to all, you may have the organizational chops to keep the books for your business. If you haven’t viewed your last three banking statements and have no idea the service fees you’re being assessed, you’re probably better off leaving the bookkeeping to a professional.

Do you have the time?

Depending on the size of your business, bookkeeping can take you anywhere from several hours a month to much longer. If you’ve set up online access to your business accounts, downloading statements is easy. However, then you need to categorize your income and expenses into data spreadsheets, or invest in bookkeeping software. If your business relies on vendors, make sure you set aside time to review their invoices and generate payments. Some companies have a slow period every month, so taking on bookkeeping fits into the owner’s business schedule. If the only way you can manage your books is by pulling several all-nighters, outsource the job.

Can you afford a bookkeeper? Can you afford not to?

Typically a bookkeeper charges one of two ways: by the hour, or a flat monthly fee based on the number of business transactions that need to be recorded. Get bookkeeper recommendations then meet with each candidate. Detail their responsibilities. Are you comfortable giving a bookkeeper online access to your business accounts, or would you prefer he do data entry from paper statements? Will payroll need to be generated? Will she need to create documents for your accountant and file tax forms for your business? Have each candidate submit an estimate for their bookkeeping services.

As with any business decision, you must consider the cost and benefits before hiring a bookkeeper. Even if you determine that you can handle your company’s bookkeeping in the short term, regularly re-evaluate the need for a bookkeeper as your business grows. I always recommend to outsource the bookkeeping function to a professional right away as you have more important, revenue generating, activities to attend.