Even the most experienced entrepreneurs rely on professional help when it comes to managing their finances.
Accountants and bookkeepers are an invaluable resource when it comes to keeping an accurate financial picture and ensuring your operation is running smoothly.
What do bookkeepers and accountants do?
While there’s some overlap between these two roles, they generally handle different financial tasks that are integral to running a small business smoothly.
Bookkeepers handle day-to-day tactical tasks like maintaining financial records of all transactions, keeping track of accounts receivable/payable, managing payroll, and maintaining the accuracy of financial processes.
Accountants handle big picture analytical tasks like tax planning, analyzing financial records, creating financial reports, offering financial advice and projections, and auditing financial operations to ensure efficiency.
Some bookkeepers will handle basic accounting tasks, and some accountants will take on basic bookkeeping functions. So it’s important to be clear on your business’s needs before you hire.
Do you need both a bookkeeper and an accountant?
Most independents will find they need bookkeepers and accountants for different tasks at different times. Fortunately, these are roles you can outsource for help as-needed rather than hiring full-time staff.
When to work with a bookkeeper:
In the early stages of a business to establish good financial habits, systems, and records
On a monthly or quarterly basis, to stay on track and ensure any problems with reporting are caught
When setting up new systems / hiring new employees to ensure accuracy and efficiency
When trying to manage day-to-day finances gets in the way of running your business
When closing out the year to ensure that you have accurate records
When to work with an accountant:
At tax time, to ensure accuracy, maximize deductions, and avoid a potential audit
If you’re dealing with capital, credit, loans, or investors requiring financial reports
When you’re considering growth to get a realistic view of your financial standing
When your revenue is increasing but profit isn’t—how do you increase profitability?
Keep in mind that the work your bookkeepers and accountants do will often inform each other. So you may consider reaching out to a single firm—or even a single person who’s able to handle both functions—to ensure smooth overlap.
How much help do you need and how much will it cost?
In the early stages of setting up a business (the first 6 months
to a year), you’re likely to need help from a bookkeeper for
several hours a month until systems are up and running. After
that, you can transition to weekly, monthly, or even quarterly
depending on your needs, budget, and areas of expertise.
Depending on location, workload, and experience, part-time
rates typically run $20-60 / hour with minimum monthly
charges for businesses requiring less work.
You may find yourself only really needing an accountant during
times when you’re trying to boost the capital available to your
business: tax time, raising money from investors, getting bank
loans, generating new revenue streams, or increasing profit
margins. With that in mind, depending on location, workload,
and experience, the rate for part-time accountants will typically
run $50-75 / hour.
For more experienced accountants—especially CPAs (Certified
Public Accountants)—rates will typically be $100+ / hour, but keep
in mind that they may be able to work more quickly, save you
money in other areas of your business, and potentially help you
How to find bookkeepers and accountantsWord of mouth
This is the most common and most reliable way to hire professional
service providers for your business. Talk to your fellow business
owners, entrepreneurs, and industry peers who are dealing with
similar issues and are likely to have local recommendations so you
can work with someone face-to-face rather than remotely.Referrals
Consider getting vetted referrals from your local Chamber of Commerce,
Small Business Development Center, or
your state accounting society.Directory sites
There are a number of online directory sites geared towards helping
you find and research bookkeepers and accountants based on your
location and business needs:Online service providers
There are also a variety of online service providers who’ll help you
find a local accountant or bookkeeper to work with in person or
even handle your accounting and bookkeeping needs remotely / online
As you develop a short-list of bookkeepers or accountants to
consider, keep in mind that you’ll want to interview them the same
way you would any other hire (part- or full-time) for your business.
Remember to check references and check with associations to
ensure certifications are accurate and up to date.