For the Record, Yes, You Should Consider Hiring a Professional Bookkeeper

It’s peak season and your contract shop is swamped with jobs. You’re spending more time in the field than in the office. Several weeks go by without any time to check on the status of invoices. Oh, and that quarterly tax deadline is just around the corner, and you haven’t even begun to tally up the numbers that the IRS is expecting.

At this point, it’s probably time to hire a professional bookkeeper.

The need to make quick cash often ends up costing independent contractors in the long run—especially on the financial side—when they resist getting help.

“It's time consuming to find bookkeepers, interview them, get references and hire someone,” says Donna Maria Coles Johnson, CEO of Indie Business Media, LLC, a Charlotte, N.C.-based company that provides consulting services to independent contractors and small business owners nationwide. “Since bringing in the cash is the priority, this issue often slips through the cracks. Of course it can be fixed, but by then the tax consequences can be financially devastating.”

Johnson feels that business owners should hire a bookkeeper or CPA as soon as they make their first fee. It’s not as complicated as you may think, according to experts, as long as you follow these guidelines:

Take baby steps. Given the hesitation of independent contractors to hire a bookkeeper, Johnson suggests simply trying out the idea initially instead of diving in headfirst. “Most times, especially early on, a full-time bookkeeper isn’t necessary,” she says. “So bring on a part-time bookkeeper at first, just to make sure that missed payments and lagging accounts receivables don’t become an issue. If your business starts growing by leaps and bounds and you need more help, the bookkeeper will let you know when it’s time to go full-time.”

Seek a bookkeeper with a track record of growing revenues. Check references and, during the interviews, get a sense of whether the potential hiree can go beyond the basics. Does the candidate have a history of finding additional revenue streams? Reducing administrative waste? Staying on top of old and new tax regulations that can save you money? In this sense, a bookkeeper can emerge as a highly valued business partner. “Together, a small business owner and bookkeeper can work on making sound business decisions for the continued growth of the company,” says Julie Cubino, a South Burlington, Vt.-based certified professional organizer and business coach.

Get your books in order BEFORE the bookkeeper comes on board. Just because you’re writing the check doesn’t mean that you dump a pile of paperwork on your new bookkeeper’s desk and say “Good luck!” You need to spend time getting a sense of where you are, record keeping-wise, and where you want to be. Then sit down with the bookkeeper for an initial discussion about your own approach to bookkeeping, as well as your goals and how the two of you will work together to accomplish them. “It can be challenging to have someone do your books if they are in disarray,” Cubino says. “The business owner needs to be able to get the necessary documentation to the bookkeeper in a coherent format. It is possible to hand over the books in a disarray. It will just cost the business owner more money to pay the bookkeeper to organize them.”

Come up with a system that works for both of you. Your bookkeeper may be sharp, but he or she isn’t a professional mindreader. You need to work out a mutually agreeable system for turning over records, being available for questions and reporting information. According to Cubino, both yourself and your bookkeeper will need a clear understanding of the answers to the following questions:

• What information needs to get shared?
• How will you share information?
• How frequently will you share information?
• What is the process for reviewing the books together?

“Hiring someone to do the books does not mean relinquishing all knowledge of what is going on in your books,” Cubino says.

Set up the line of authority. Handing over the books to a bookkeeper isn’t an invitation (or an abandonment) of your input on the reporting. In fact, the owner should be the sole voice when it comes to the way the books are recorded. “No bookkeeper should ever be allowed to make changes to way the books are kept,” says Paul Stappas, founder of Neshanic Station, N.J.-based Bookkeeping Administration Management, which provides bookkeeping services to small and mid-sized businesses. “Constant changes are totally unnecessary and make it impossible to compare statements from quarter to quarter or year to year. Only the owner should have the authority to approve changes and any change must be the result of a major need or requirement.”

Seek a bookkeeper who is well-known and active in the community. When interviewing, ask about any outside associations that he or she is a part of. Those associations could result in new potential customer pools for you to pursue. “My CPA referred me to a new insurance broker,” Johnson says. “She’s a member of the local chamber of commerce and has referred new business my way through that. The more connected your bookkeeper is to the local community, the more mileage you get out of the relationship.”

In the end, a good bookkeeper can provide something that money can’t buy: peace of mind.

“You’ll sleep better at night when you realize that you can, just by cutting a check once a month, save on potentially thousands in taxes and stay on top of all of your accounting needs,” Johnson says. “You know where your money is going and where it’s coming from. That’s the essence of business.”