How do you know when it’s the right time to hire a Bookkeeper? Would you know? Or would you be like most entrepreneurs and assume that it’s a job anyone can do, a cost you don’t need or something you can simply do yourself.
A cautionary tale about ‘doing it yourself’
Let me tell you a story about an entrepreneurial business owner who happened to be pretty good with numbers. She ran the family business without a bookkeeper, divvying out tasks among admin staff, high earning employees and her family – including her Dad and Husband.
Why did she choose to do this?
Well, cost was a factor. Bookkeepers don’t charge out their time, so they are an overhead for any business. And like many people, she thought they could just do it themselves.
This worked okay for a while. They were a pretty tech-savvy business. Lots of the tasks were automated by software, so they managed to keep on top of things most of the time. But eventually they realised that their decision was having some negative effects:
- They made mistakes with invoices, usually forgetting to invoice clients and losing precious profit. And their clients thought they were a bit sloppy for not getting the basics right.
- They left bills unpaid for so long they turned bad when the businesses went bust.
- They found that too many cooks spoil the broth – having all those people involved in the process made communication really tricky. Messages had to be passed around several people before actions could be taken.
As you might expect, as a result, family arguments over mistakes and miscommunications started to seep out of work time and into family time.
Ultimately it seemed that all the time they were spending on administration and problem-fixing meant that they were losing sight of the real purpose of their business and losing time they could be spending on delivering real value to their customers.
For many entrepreneurs, especially family businesses, this will be a very familiar story. Particularly for those who remember the days when Mum or Dad would write up the books on the kitchen table on a Sunday.
That’s why I don’t feel too bad admitting that this is our story. We might be accountants but we are still human. Even though we should know better, we still made this age-old mistake and thought we could do it ourselves.
So the day has finally come and we have decided to hire a bookkeeper.
Whether to hire in-house or outsource
Like many businesses I’m sure, technology has reduced our need for some roles and freed up our budget to reimagine roles or bring in technology. We’re aiming to meet higher standards of client service meaning we’re communicating in new ways with our clients and completely changing the way we price and invoice. Hiring a bookkeeper has become more important than ever.
Did we really need a new employee?
We often recommend our outsourced bookkeeping services to our clients (obviously!) but there are a few occasions where we advise that it’s not the right fit. We encourage you to ask yourself these questions:
1. Do you need someone in the office?
Do you want an extra pair of hands to answer the phone, or open the post or bring you cups of tea (important to factor in!)? Is having a person in the office going to be much more useful to you than carrying out that task yourself?
2. Are there other major gaps in the business this person could fill?
Do you need someone to run the wages for example, or keep on top of the HR paperwork?
3. How much work is involved?
Do you have enough work to keep someone busy for 3-5 days per week? If so an employee will probably be cheaper.
Of course for many businesses, the answers to these questions are no, in which case an outsourced Bookkeeper can be a less risky and more cost-effective option.
But for us, right now, we are employing a new bookkeeper. And we’re looking forward to saving time, money and getting a good night’s sleep…
Need help figuring out which option is best for you? Just ask.