When thinking about how to do your company’s bookkeeping, there are a number of decisions that need to be made. The very first, before anything else, is choosing whether to hire a permanent bookkeeper, be it an in-house professional, hiring a freelance bookkeeping service, or doing it yourself.
Here, we’ll look at the pros and cons of each option, so you can feel ready and confident when it is time to start managing your company’s accounts and financial records.
Hiring someone to become part of your permanent staff is a great option for many companies. It may be that you already have an in-house accountant, and passing some of their duties on to a bookkeeper will free your accountant up to deal with more complex financial responsibilities.
The nitty-gritty of recording and storing financial data can be undertaken by someone without the advanced qualifications just as well. This might be a better way of delegating duties to best utilise the time and the skills of those you have on your team.
Even if you don’t have an accountant already on your books, it may be that your company could benefit from an in-house bookkeeping professional to act as the sole financial agent. This is a good way to make sure that someone is responsible for keeping an eye on the money side of the business so you can focus on other areas.
They might have an idea of where you can streamline and save money, or they may also have the opportunity to look into less urgent matters and identify opportunities you could have missed.
A bookkeeping service
There can be many benefits to using a bookkeeping service, whereby an agency will send a bookkeeper to your offices when required to sort out records and keep on top of tax documents.
For many smaller companies, this is an ideal compromise. Most will still need to take a little responsibility keeping paperwork for financial records, such as compiling receipts or invoices. This approach does have the benefit of meaning that you keep a relatively clear picture of what your financial health looks like at all times, without paying out for a permanent professional.
If you go for that option, a bookkeeping agency could come in monthly to deal with your payroll and recording monthly takings, and may also be in charge of dealing with end-of-year documentation. This can be a great way to stay ahead of any issues that may arise over the course of a financial year, whilst also avoiding any potential legal penalties.
Using a bookkeeping service also has the potential benefit of having many different eyes on your financial records throughout the year. This can be a positive as it reduces the chances of any tiny errors or mistakes being overlooked.
It may be tempting to take on the bookkeeping yourself for your own company, but this should be the last resort, if you don’t have the appropriate experience. Whilst it can save money in the short run, it takes time away from your vital business activities and potentially from your precious free time. If you are not a trained financial professional, it could take you much longer to complete tasks a bookkeeper could do in a shorter time.
There is also always the possibility you might make a mistake that could cost you dearly when it’s time to file your tax return. Having a bookkeeping professional on hand is also the best way to make use of any ambiguity in the taxation system that could save you money in the long run.
There are numerous benefits to hiring a bookkeeping professional, be it through the addition of a permanent member of staff or through a service. Having someone who can take the time to properly record and assess your company’s financial information is definitely worth the cost outlay. Typically, this ranges between $35–$60 per hour of their time, depending on the size of the company