Considering Adding Bookkeeping Services?

There are many reasons to hire a bookkeeper when running a small business.  Here we explore some of the reasons why it might benefit small business owners and what qualities might be essential once the decision to hire has been made.

Why is a Good Bookkeeper Important?

Good fiscal management is critical to business success. Accurate, up-to-date, and organized financial records not only assist CPAs or financial advisors to submit timely and accurate tax returns but help them provide informed recommendations to improve business health. A good bookkeeper can provide month-to-month, or even week-by-week updates to the financial status of businesses. Timely and insightful reports cannot only relieve the hours required to maintain accurate records and reporting but can lead to cost savings and improved revenue, with estimates of up to $7,500 in savings annually.

I Have a Small and Uncomplicated Business & Mostly Monitor My Income and Expenses; Do I Need a Bookkeeper?

Not all small business owners require a bookkeeper. If they are sole proprietors and have few transactions, if they simply monitor revenue and expenses, it might be easy enough for the owner to record these transactions and work directly with their tax professional or use online software for accounting and taxes. However, when business owners spend over 10 hours a week handling accounting, it takes away valuable time, time that might be best utilized for addressing challenges with creative approaches and developing strategies to grow and boost revenue. This is the tipping point where considering a bookkeeper is vital. If there is any aspect of the business that is more complicated and requires special handling, especially when it pertains to sales tax, payroll, accounts payable and accounts receivable, then it is even more important to consider utilizing bookkeeping services.

What are the Qualities of a Good Bookkeeper?

Diligence with Details

This is one of the most critical skills, as small mistakes in the books can lead to disastrous consequences with significant errors in financial reporting and tax returns. Meticulous attention to categorization and reconciliation of transactions, maintenance of source document files will lead to seamless transfer of records to auditors and tax professionals and enhance shareholder trust.

Proficiency in Accounting Software

Maintaining current certification and ongoing education in accounting programs is essential for organization of financial transactions and accounts, and ensures records are readily accessible when needed. Use of accounting software is more efficient and can minimize errors, and communication between the bookkeeper and business owner is more streamlined.

Good organizational skills

Organizational skills ensure that financial records are timely and pertinent deadlines met, such as tax filings and payroll obligations. Organized records streamline the auditing process and assist tax professionals in reviewing the records. With files and receipts in an organized system, the reduction in tax preparation and/or auditing time can be a direct cost benefit for the business owner.

Time management

It is important that the bookkeeper maintain a consistent financial reporting schedule and effectively navigate between the multiple tasks, making sure to meet deadlines for reporting or tax liabilities timely, reducing the risk of penalties or missed opportunities to improve business performance.

Analytical Thinking

It would be an oversimplification to assume that a bookkeeper simply works with numbers. One of the most important tasks of the bookkeeper is the appropriate assignment of categories and reconciliation of bank statements and receipts. As the bookkeeper generates financial reports, it is important that he or she be capable of discerning trends, noting potential savings and areas for improvement. Recognition of ways to help the business owner improve on the overall health of the business requires the ability to analyze and present the data to the owner with clarity.

Excellent Problem-Solving Capability

An important task for the bookkeeper is to review and resolve any discrepancies in the records to ensure that the records are accurate. Excellent critical thinking skills help ensure that the bookkeeper can troubleshoot rapidly and effectively.

Integrity and Trustworthiness

It is the bookkeeper’s responsibility to maintain client confidentiality, keep accurate and secure records, communicate only with authorized parties and maintain a high ethical standard to make sure that the financial records are never compromised. Honesty and integrity are vital to best meet the needs of vendors, customers, business teams, and any ancillary professionals affiliated with the business. These traits are safeguards which protect customers and the reputation of the business.

Effective Communication Skills

Bookkeepers must not only be accurate in their financial recording and reporting, but they also need to be able to effectively communicate with their business clients, tax professionals, auditors, customers, and vendors. They must be able to share any trends noted in financial reports, be able to explain any discrepancies and provide solutions for resolution. It is also critically important that they immediately establish rapport and communication with tax professionals to ensure the books are set up and executed correctly for a seamless transfer of data come tax season.

Flexibility

Accounting software and market trends are constantly changing, and the bookkeeper must be able to follow and adapt to any changes in industry trends, new regulations, changing tax laws and technologies. This in turn ensures that the businesses they serve are efficient and compliant.

Industry-Specific Knowledge

A bookkeeper with experience in a particular industry can provide added value, as they are familiar with needs and regulatory requirements of the business and may be able to bring insight specifically targeted to the needs of the business.

In summary, a good bookkeeper is not just managing financial recording; they are an excellent resource for maintaining business health with insightful reporting, compliance with regulatory requirements and tax liabilities. Choosing a bookkeeper who possesses these qualities can enhance business function, efficiency, and profitability.