Question
I hear so many entrepreneurs say they wish they hired a bookkeeper sooner than they did. I'm curious to know what exactly a bookkeeper does and whether I should hire one or continue to manage my books myself.
Basically, my DIY system for the past few years is this: every 1st of the month, I tally up all of my revenue and expenses, record them in a spreadsheet. I use this to figure out my profit and amount to pay in quarterly estimated taxes. I have my accountant handle filing my (my family's) annual tax return.
As my business is beginning to grow and become more complicated (growing team, more revenue streams, etc) I'm starting to think its time to hire a bookkeeper. My business consists of a mix of consulting, a SaaS product, and some one-off digital products.
The questions I have are:
1. What are the tasks that a bookkeeper performs, and how often?
2. What are the benefits of having a bookkeeper vs managing it yourself?
3. How does one get started working with a bookkeeper?
4. Is a bookkeeper and CPA the same thing? Should I have one bookkeeper for my business (LLC) and separately an accountant who handles my family's annual tax return? What's a typical approach here?
5. What are the going rates for a US-based bookkeeper for a small LLC?
Answer
Yes. We have a small CPA firm that works for us but they do bookkeeping separately for a small monthly fee. It's one of the best things you can do for a few reasons that include providing more accountability to you as a leader.
Bookkeepers are not the same as a CPA firm but ususally CPA firms have bookkeepers. Bookkeepers simply make sure that each month your financial statements look right by reconciling the different accounts where money comes in and money goes out. It only takes a couple hours each month for them and it's not expensive compared to what happens at the end of the year if something's wrong and you have to step away from what you should be focused on to work on taxes and investigating expenses. Not having to worry about monthly reconciliation, taxes, on top of getting recommendations and input from them made this one of the he best decisions we made. I'd recommend at least trying it for a couple of months.
