One of the toughest parts of running a your own business is resourcing and understanding exactly which type of person you need for the role you have to fill, especially if you are new in business or a start up. In my early years I did a lot of bookkeeping work and there were some occasions where it transpired that actually my client did not need to hire a bookkeeper at all. Now, I was lucky because my clients always managed to keep me on as well as add additional resource but before you rush in with hiring a bookkeeper, potentially incorrectly, let me tell you more about the mistakes that I have seen:
You Don’t Need One
When you feel overwhelmed with work it can be hard to make the right decisions. I’ve met with new potential clients in the past and once we have talked out their problems we’ve discovered that all they need to do is make a few tweaks or set up a spreadsheet that they can manage themselves. Consider having a conversation with your existing accountant to discuss your position and help you decide whether you really do need to hire an accountant.
You can’t afford one
This is an awkward one but bookkeepers, like anyone else, need to be paid. There is sometimes an assumption that because the bookkeeper is party to the financial affairs of the business they will wait for payments. Unfortunately this isn’t so and it can lead to a fractured relationship, with the bookkeeper not performing well or worse still walking out on the business and leaving them in the lurch.
You don’t really want to follow the rules
For a bookkeeper to perform their job, then they will need a certain amount of paperwork and explanations to keep accounts up to date. If you are dipping into the bank account, not filling out expenses or mixing up your business and personal transactions then a bookkeeper will struggle to produce meaningful numbers. So if this is you then carefully consider if you are willing to change your habits – there is nothing wrong if the answer is no, plenty of businesses run that way, but just be sure you are willing to commit to the processes hiring a bookkeeper will bring.
You need an accountant
Accountants and bookkeepers do different things. A bookkeeper will generally be responsible for processing day to day transactions onto your accounting system whereas an accountant will take the numbers that the bookkeeper has entered to help assess the business and make strategic decisions. If you are looking for more strategic advice on business growth, planning or funding then you may need to re think whether you need to hire a bookkeeper (or even a combination of a bookkeeper and accountant).