A while back, I wrote about 3 reasons to hire a bookkeeper. These were more big picture examples, so today I wanted to talk about very specific tasks I (or another bookkeeper) can help you with on a regular basis. I think there are a lot of misconceptions about what a bookkeeper is and isn’t. Also, every bookkeeper is different. Some people, when they hear I’m a bookkeeper, naturally start asking tax questions. Although I happen to do tax preparation, that’s not the case for many bookkeepers. I think I’ll write another post about misconceptions, but for now, let’s go over a few specific ways a bookkeeper can help your small business. These won’t apply to all bookkeepers, so always be sure to ask very specific questions before you hire someone.

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Personal finances

If you’re having a hard time keeping track of your money at work, you might also have the same problem at home. Do you find that you’re getting a few too many warning letters from your utility companies? Would you be shocked to find out just how much you spend on take out each month? Of course, you could be tracking this yourself with Quicken or Mint.com, but if you have a bookkeeper keeping your business records organized, that same person could do the same for your personal finances. A bookkeeper can show you where your money is going, help pay your bills on time, and suggest the best way to increase your net worth.

Tax preparation

Many people will default to calling up a national tax service every year to help them with their returns. I have heard of some disturbingly high fees they pay to have their personal and business tax returns completed. Before you hire another company, ask your bookkeeper if they could be doing these returns for you. If you are a sole proprietor, the income and expenses will be recorded on a personal T1 return (or the equivalent in your country), which is within the scope of many bookkeepers. Plus, if they have been handling your business and personal finances throughout the year, most of the work is already done. Corporate returns will be on a case by case basis. Depending on the details of your corporation, T2 returns can be done by a bookkeeper too. More complicated returns, or ones that require certain accompanying reports, will have to be completed by an accountant.

Year end financial statements

If you run an incorporated business, you’re probably used to having to spend thousands every year on an accountant. The accountant usually completes your corporate tax return, as well as a set of financial statements. Did you know that some of these could be done by a bookkeeper? If your business has significant loans, the lender will probably insist that the financial statements be prepared by an accountant. If, however, this doesn’t apply to you, those same statements can be prepared by a qualified bookkeeper. And, they can usually be done for a reduced rate. Don’t get me wrong, there’s a reason an accountant charges more money. They have extensive training and expertise in this area. If you have a complex business, I would still recommend you hire an accountant. If your business is fairly straightforward, it might be a good idea to ask your bookkeeper instead.

Consulting and training

Maybe you really don’t need someone to help you with your record keeping. Instead, you just need some advice from someone who has experience in that aspect of your business. Maybe you bought a new program, and just need some help setting it up. Bookkeepers often do consulting and training too. You wouldn’t hire a full time graphic designer if all you need is one logo, right? There’s also no reason to hire a full time bookkeeper if all you need is help getting started. Bookkeepers can help you get your software configured properly, give you advice on a filing system, or even what banks are the best to deal with.

Occasional “heavy lifting”

As in the last example, you don’t always need to hire a bookkeeper on a full or even part time basis. Maybe you’re really busy, and need help getting a few months caught up in your system. If tax season is coming up, you might just need help getting your records organized before you send them off to the accountant. Instead of paying an accountant’s hourly rate, it would be much cheaper to get a bookkeeper to do some of the heavy lifting before submitting your books.

I hope these will give you a few new ideas on how a bookkeeper can help you with your small business. Do you have any tips of your own? Do you disagree with any of these? Let me know your thoughts in the comments.

During the 34 years I’ve been around, I have come to the realization that I am an anomaly. When I was 14, and my friends were sleeping in or going to the pool, I spent the mornings of my summer vacation at my mom’s office. They needed a clerk, since someone had just quit, and I was hired on for the summer. I spent hours pouring over ridiculously large printouts, recalculating each column and looking for errors. If that wasn’t enough of a deterrent, the $4/hour I made should have been. Yet somehow, I loved it.

It turns out that most people don’t find accounting interesting. In fact, it’s usually the part of running a small business that owners hate the most. Despite this, maybe entrepreneurs begrudgingly toil over their books for hours on end, often coming out with no better understanding of their business than when they started. Does this sound like you? Have you been putting off outsourcing this work? Maybe it’s time to delegate this task to someone who actually enjoys it. Here are 3 reasons to consider hiring a bookkeeper.

1. Lack of time

No matter how hard we try to extend it, a day will always contain 24 hours. If a petition ever went around, asking for the day to go to 30 hours, I’d be the first to sign it. Until then, there are just so many things we can accomplish each day. If you are trying to juggle sales, marketing, shipping, and bookkeeping at once, something is going to suffer. There is nothing more important to an entrepreneur (especially when they are the only employee) than effective time management. Spending 5 hours doing a bank reconciliation that would take a bookkeeper 30 minutes just doesn’t make sense. Sure, it’s an extra cost each month, but how many more sales could you have made in those 5 hours? Which scenario is really costing you more money?

2. Lack of knowledge

I’m sure most of you wouldn’t attempt your own dentistry in order to save some money. If debits and credits are as confusing to you as differentials and tie rods (I think those are car parts) are to me, you could be doing yourself more harm than good. At best, you’re not getting an accurate picture of where your business is at. At worst, you will be getting a call from Revenue Canada (or IRS, etc.) that include words like “audit” and “jail time”. The costs I’ve seen people spend on late fees, interest, and penalties are breathtaking. Once again, is doing it yourself really saving you money?

3. Lack of interest

On a less serious note, bookkeeping is really boring (for almost everyone). I’ll bet most of you would much rather be selling, or reaching out on Twitter to new clients than printing out trial balances and income statements. I know you want to have that data available to you, but wouldn’t you rather just have it show up like a gift every month. Although business isn’t supposed to be all fun and games, filling your days with tasks you hate makes it hard to get motivated. Don’t worry, you’ll still have angry customers, shipping delays and software bugs to drive you crazy.

I completely understand the desire to do everything yourself. I’m equally stubborn and cheap, so the idea of admitting I can’t do something, and then paying someone else to do it usually ranks up there with root canals and Katy Perry. At the end of the day, you need to make the most of your time, money, and expertise. Bookkeeping is a very important aspect of your business. It can give you a very good picture of where you’ve been, which will help you make informed decisions on where to go next. If you don’t feel like you have the time, knowledge or desire to do it yourself, there are thousands of us out there that would love to help.