What every business owner needs to know before hiring a bookkeeper or accountant
Running a business means juggling a lot of things—hiring the right team, managing your product or service, staying ahead of competitors, and, of course, keeping your finances in check. But when it comes to your financial health, it’s not something you want to leave up to chance. That’s where hiring a bookkeeper or accountant comes in. But how do you know which one you need? What should you look for? And how do you avoid mistakes? Let’s dive into what every business owner should know before making this important decision.
Bookkeeper vs. accountant: What’s the difference?
Before you even start looking for someone to handle your books, it’s important to understand the difference between a bookkeeper and an accountant. It can be easy to think they do the same thing, but they really don’t.
Bookkeeper: Think of a bookkeeper as the person who keeps the day-to-day finances of your business organized. They’ll track transactions, manage accounts, handle invoices, and make sure that your financial records are up to date. If you’re a small business owner who’s just starting out or if your business doesn’t require complex financial analysis yet, a bookkeeper might be all you need.
Accountant: Now, accountants take things to a higher level. They’re the ones who handle the complex financial stuff—think tax filings, audits, and financial planning. Accountants are like the financial strategists of your business. If you’re looking to get advice on how to grow your business or you need to ensure you’re tax-compliant, an accountant is the right choice.
When should you hire a vookkeeper?
So, when should you hire a bookkeeper? The short answer is: as soon as your business starts to grow. If you’re still running everything yourself, but you’re finding it hard to keep up with receipts, invoices, and tax deadlines, it’s time to get help. Here’s a quick rundown of when a bookkeeper comes into play:
- You’re overwhelmed by the numbers: If you’re spending more time tracking expenses than running your business, that’s a red flag.
- You need financial reports: A bookkeeper will help you track and organize your financial data so you can get regular reports, which will help you make informed decisions.
- You want to keep things simple: Bookkeepers are great for keeping your records in order and your transactions smooth. They handle all the grunt work, so you don’t have to.
Having a bookkeeper on your team means you can focus on what really matters: growing your business. Plus, you’ll avoid the headache of sorting through stacks of receipts come tax season.
When should you hire an accountant?
But what if your business is more complex or you’re facing bigger financial decisions? That’s when an accountant comes in. You may be ready for one if:
- Your taxes are getting complicated: As your business grows, so do your tax responsibilities. Accountants can ensure you’re compliant and help you take advantage of deductions you may not even know exist.
- You need strategic advice: Accountants can help you plan for long-term growth. Whether you’re looking at investing in new technology, expanding your team, or planning for retirement, accountants give you insight into how those decisions will impact your business financially.
- You’re facing an audit: If you ever find yourself in an audit situation, an accountant is your best friend. They’ll know how to handle everything from documentation to communicating with the IRS.
Accountants are the financial backbone of your business. They make sure you’re not just managing money but growing it in the right direction. So if you’re aiming for major business milestones—whether it’s scaling up, securing funding, or maximizing profitability—an accountant is essential.
How to choose the right bookkeeper or accountant
Now that you know when you need a bookkeeper and when you need an accountant, the next step is choosing the right person for the job. Here’s what you should look for:
- Credentials: Make sure they’re qualified. For bookkeepers, look for certifications like the Certified Bookkeeper (CB) designation. For accountants, check that they’re a Certified Public Accountant (CPA). If you’re unsure about where to find someone reputable, Plainview CPAs are a great example of experienced professionals who can meet all of your accounting needs.
- Experience: It’s not just about credentials—it’s about experience in your industry. A good bookkeeper or accountant should understand the ins and outs of your business, including common challenges and tax rules specific to your industry. This knowledge can save you a lot of headaches down the road.
- Tech-savviness: In today’s world, everything is going digital. So make sure they’re comfortable with accounting software r any other system you’re using. If they’re still stuck in the Stone Age with paper records, it might be time to move on.
- Communication: You want someone who can explain things clearly without all the jargon. You don’t have to be an expert in accounting, but your bookkeeper or accountant should be able to break things down in a way you can understand.
- Trustworthiness: You’re giving them access to your business’s financial information, so trust is key. Look for a professional who’s reliable, transparent, and ethical.
Red flags to watch out for
When you’re meeting potential candidates, there are a few things that should raise alarms:
- Lack of credentials or certifications: This is a non-negotiable. If someone doesn’t have the right qualifications, they shouldn’t be handling your financials.
- Vague pricing: Be wary of accountants or bookkeepers who don’t give you a clear idea of how they charge. Are they hourly? Do they charge by the project? Make sure their pricing structure is clear and reasonable.
- Poor communication: If they’re difficult to reach or aren’t clear in their answers, that’s a big problem. You want someone who’s responsive and willing to explain things in plain language.
- No references or reviews: A reputable professional should have a track record you can check. If they can’t provide you with any references or reviews, it might be a sign they’re not as established as they claim.
How much should you expect to pay?
One of the biggest concerns when hiring a bookkeeper or accountant is cost. So, how much should you expect to pay?
It really depends on a few factors: the size of your business, the complexity of your financial needs, and whether you’re hiring a bookkeeper or an accountant. Bookkeepers generally charge by the hour, with rates ranging from $20 to $50 per hour, depending on experience and location. Accountants tend to charge more, especially if you need tax planning or financial advising.
Here’s the thing, though—while hiring a professional may seem like a big expense at first, it’s an investment. A good accountant or bookkeeper can actually save you money by making sure your finances are in order, helping you avoid costly mistakes, and ensuring you’re paying the right amount of tax.
Questions to ask before hiring
Before you make your final decision, here are some important questions to ask your potential bookkeeper or accountant:
- What experience do you have with businesses in my industry?
- Can you explain your pricing structure?
- What software do you use for bookkeeping and accounting?
- How do you ensure data security?
- Can you provide references from other business owners you’ve worked with?
Asking these questions will give you a good idea of whether they’re the right fit for your business.
Conclusion
Hiring the right bookkeeper or accountant is one of the most important decisions you can make for your business. It’s not just about managing your finances—it’s about setting your business up for success. Whether you need someone to handle your daily transactions or someone to help you strategize for growth, the right professional can make a world of difference.
So, take your time, ask the right questions, and choose someone who understands your business and can help you navigate the financial challenges ahead. You’ll thank yourself later!