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Why hire a bookkeeper?
October 12, 2012

Why hire a bookkeeper?

When an individual starts a small business they usually do everything.  They are responsible for marketing, operations, accounting, legal and anything else that you can think of.  Unfortunately unless you are a marketing guru, CPA, attorney and operations wizard all rolled into one this arrangement can become difficult.

One of the keys to operating a successful small business is understanding what your strengths are and identifying what weaknesses you have that can be outsourced to an expert.  Most of the time individuals running a business realize that they are not prepared to write a lengthy legal document so they outsource that to an attorney.  However due to the introduction of software like QuickBooks small business owners are finding themselves more apt to attempt to maintain their accounting on their own.

The reason businesses big or small need books for their operations is so that they can generate meaningful financial statements.  A profit and loss statement and balance sheet can help a savvy business owner identify potential opportunities and areas for concern.

Excellent financial statements can only be generated if the books are adequately prepared.  This is where a bookkeeper comes in.  A bookkeeper will help reconcile accounts, allocate funds to the proper categories, and ensure that the balance sheet makes sense.  All of these tasks can be accomplished by an individual well versed in accounting, however often times it doesn’t make sense for a business owner to become an accounting expert.  Why?  The reason is simply time.  Most business owners are achieving the maximum return on their time when they are actually applying themselves to their trade.  For example a landscaper may be able to bill out 80 dollars for an hour of landscape work.  That being said every hour spent handling administrative function is theoretically an hour that is lost from the profit side of the business.

This is where a bookkeeper comes in.  A bookkeeper typically will bill out 40-70 dollars an hour and will have a minimum monthly charge.  Using this as an example lets say the bookkeeper bills 200 dollars a month to reconcile and enter the data for the landscaper.  This work took the bookkeeper 4 hours to accomplish at 50 an hour.  This means that the landscaper could have worked during the same 4 hours and earned 320 dollars.  This of course means that the landscaper was better off actually running his or her business as opposed to handling the books.  Not to mention the fact that the bookkeeper is likely more efficient at the books because that is what he or she does for a living.

Keeping good books is essential for running a business, and often times it makes a lot of sense to find a bookkeeper that can help take the burden off your shoulders.

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Author
Ryan Stone

Ryan Stone has been an Enrolled Agent (EA) for 3 years and has worked in the accounting industry for 5 years. He specializes in individual and small business taxes plus tax mitigation.

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