Bookkeeping tracks all your day-to-day transactions—money
entering & leaving your business. It also categorizes those transactions,
so you can see how you’re spending money, and how you’re making it.
Accounting takes info from your bookkeeping, crunches
the numbers, and shows you the big picture. Financial reports like income
statements & balance sheets show you how much money you’re earning, and how
much you have to work with.
Small businesses often
hire some kind of outside help to manage their accounting tasks. There are a
few reasons why.
Accounting eats up time
There’s no way around it. Even if your
spreadsheets are true works of art, DIY accounting will cut into time you could
otherwise spend helping your business grow.
Accounting is high stakes
Make a mistake on your tax return, and
you could get fined by the IRS—or even trigger an audit. Miscalculate your
income for the month, and you could find yourself coming up short on cash when
it’s time to pay vendors. Accounting is high stakes, and small errors can have
big consequences.
Good accounting takes expertise
Even if you spend sleepless nights
poring over textbooks, you won’t have the expertise of a professional
bookkeeper, accountant, or tax planner. That’s because they have
experience—they’ve worked with many businesses, and understand first-hand the
mistakes to avoid. When your accounting is outsourced, you have experts
fighting on your side.
Hiring a local bookkeeper
Cost: $20 to $50 per hour, usually
with a $100–150 monthly minimum.
Best for: Small to mid sized business
owners who want to meet their bookkeeper face to face, or who work with a lot
of paper records like receipts.
How it works:
When you hire a local bookkeeper or a
firm.
A firm is a company that employs many
bookkeepers. A large firm will serve any business, regardless of industry.
One
of the best ways to find a local bookkeeper that serves your needs is to ask
other business owners in your area. This is especially true if you’re looking
for a firm specializing in your industry.
