Money

Hiring Accountants & Bookkeepers

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?

  • Bookkeepers

    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.

  • Accountants

    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 generate revenue.

What should you look for in a bookkeeper or accountant?

  • Do they communicate clearly?

  • Do they have some formal business/accounting training or a professional certification?

  • Do they have prior experience in your industry?

  • What do their references say about their attention to detail and ease with numbers?

  • What software do they use or prefer?

  • What is their availability on an ongoing basis and what do they charge?

For bookkeepers

  • Can they help you set up accounting policies and procedures for your business?

  • Are they comfortable/experienced enough to take on some accounting tasks?

For accountants

  • Is there experience level the right fit with your business needs? (Keep in mind that you may or may not need the expertise of a CPA for your financial goals.)

  • Can they help you achieve your long-term business goals? (e.g. running financial projections to raise capital)

  • How specialized are they? Will they cover some bookkeeping tasks?

How to find bookkeepers and accountants

Word 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 (Bench.co & RemoteBooks 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.

Resources

  • Buyer’s Guide to Accounting Software
  • Finance Basics
  • Financial Intelligence for Entrepreneurs by Karen Berman and Joe Knight

    We’ve read a lot of books that work to simplify the world of financial management for entrepreneurs, but Berman and Knight’s book is the best we’ve found. It’s clear, fun to read and provides the right amount of knowledge seasoned with a great deal of wisdom. Buy at Amazon or IndieBound