Bookkeeping, not only an awesome triple double-letter word, is effectively the recording and analyzing of business transactions during the operation of a business. It is essential to have your “books” in order for taxes at the end of the year, and more importantly for receiving any type of financing. Even a simple line of credit from a major bank would require complete financial statements: Profit and Loss, Balance Sheet, etc.
If it is not too complicated, such as minimal income and basic expenses, you can probably buy Quickbooks and do it yourself. Certainly at the beginning, it is simple enough software to use, and just about anyone could learn quickly how to add an invoice, receive a payment, or note an outgoing wire.
However, with growing numbers of transactions, this gets super burdensome very quickly. Not only do you have to remember to save receipts and enter transactions into a bookkeeping software (such as Quickbooks), it really disrupts the workflow in performing more business-critical tasks.
This problem is compounded when transactions get more complicated. Is the purchase of that computer an expense or considered depreciating property? How do I record a half-paid invoice? How does a bank deposit get split into multiple customer accounts? etc.
These problems are easily solved by hiring a professional bookkeeper. If you already have a CPA/accounting firm, it is pretty easy to ask them to recommend a couple bookkeepers. If not, craigslist, or other recommendations. Most bookkeepers are freelance and contract with multiple companies, and may or may not be attached to a CPA.
Picking a bookkeeper should really use the same criteria as hiring an employee. Will they fit in with the team? Are they experienced and knowledgeable? Can they work well with the CPA? How much will they cost AND how fast do they work?
Once hired, you can be assured your books will be in good condition at all times, allowing for up to date financial reporting, and offering more regular financial and accounting advice at a much lower rate than a CPA.
Setting up a workflow with a bookkeeper is generally fairly speedy. They’ll need to come in about 2-6 times per month, depending on volume. They’ll need some basic access to your banks for deposits and statements. There will be some setup of new software (just use Quickbooks, it’s standard). And I also recommend setting up both a physical and digital inbox for things like expense reports, receipts, and incoming checks to keep everything organized and efficient when the bookkeeper comes in.
Contracting an external bookkeeper will save you a ton of time and headache, while improving efficiency and overall financial visibility and accuracy.