Why Hire a Bookkeeper? Key Benefits for Small Business Owners

In my previous role as an auditor at a public accounting firm, I often saw small business owners stretched thin by all the roles and responsibilities they take on, including managing their own books. 

Doing your own bookkeeping can be manageable, especially when your business is new with few transactions and simple financial needs. But keeping the books accurate and up-to-date can take a lot of time and effort, depending on the size of your business and your level of comfort with the numbers. 

As your business grows, having clean, organized, updated books can make a huge difference in your confidence around your business finances. 

So, is hiring a bookkeeper really worth it? For many small business owners, yes — but needs can vary from business to business. Here are five reasons you might decide to bring a bookkeeper onto your team.

1. To focus on what you do best

If I had to guess, I’d say you did not start your business for the joy of organizing and recording financial data. (I did, but that’s another story!)

Leaning into strengths

Bookkeeping is a skill that requires focus, attention to detail, organization, and knowledge of financial reporting. It can be learned, but to be precise and consistent requires commitment and experience. 

As a small business owner, your time is better spent focusing on operations, customer relationships, and business growth. By bringing a bookkeeper on, you can continue to lean into your strengths, and let your bookkeeper lean into theirs.

Keeping operations smooth

You encounter enough surprises while running a business, and you don’t need your month-end or year-end bookkeeping to add friction.

When business gets busy, we tend to let the books slide a bit, waiting for a chance to catch up. But when we finally find a moment to do so, the process can feel overwhelming. If you have a lot to catch up on, then it might feel like you’re falling behind on your other responsibilities, creating more business bottlenecks. 

2. To partner with someone who knows numbers

You don’t have to be fluent with numbers to run your business. Many small business owners find the numbers intimidating to work with, and that’s okay — this is where a bookkeeper can make a great addition to your team. 

A bookkeeper is used to the “ins and outs” of financial record-keeping. They understand how to categorize transactions meaningfully, and they already have systems in place to keep financial data organized. With these skills in place, they’re in a great position to help you navigate your business’s daily transactions, flag anything unusual, and explain the transactions driving month-to-month changes. 

For more on the “ins and outs” of bookkeeping, start here: What Is a Bookkeeper? A Simple Guide for Small Business Owners

Streamlining communication with your accountant

If you work with an accountant, you’re probably used to receiving many questions at year-end. These can be challenging to answer, especially if you’re answering questions about transactions that happened early in the year. 

Your bookkeeper can act as the main point of contact for your accountant. With clean, updated books and a strong organizational system, they’ll be able to handle detailed questions for you, freeing up more of your time (and preventing tax season headaches).

3. To improve the accuracy of your books

We touched on the importance of accuracy above, but here’s what that can look like, and why it matters.

Consistency is key

Timely financial data supports better decision-making, but it also helps keep the books accurate.

Your bookkeeper will ask you questions about your transactions, and any missing information, while they’re preparing your monthly books. This means that you won’t have to hunt down documents from months ago, or try to remember why a bank transfer was made. 

Avoiding common bookkeeping mistakes

Nobody is immune to mistakes, but these are some common ones that working with a dedicated bookkeeper can help you avoid:

• Misclassified transactions. This could be anything from inconsistency (e.g. sometimes meals & entertainment are lumped under advertising, and other times in their own category, making financial results harder to read), to expensing a capital asset, which skews both the balance sheet and the statement of profit or loss.

• Duplicate transactions. A common error is recording income when you issue an invoice, and then recording it again when you receive the cash payment from your customer. A bookkeeper can help track your receivables, which minimizes the chance of this error occurring.

• Missed deductions. It can be easy to miss a deduction, especially when they aren’t reflected in the bank statement; for example, deductions based on your automotive mileage. If your bookkeeper is very familiar with your books, they may be able to flag possible missing items.

4. To simplify your reporting

Whether it’s tax return preparation or payroll, your filings depend on clear, accurate records to ensure that what you’re filing truly reflects your operations for the filing period. 

Tax preparers typically review your books to ensure that what they’re reporting complies with the relevant federal and state tax rules. The cleaner the books, the fewer questions (and sometimes, the lower your tax preparation fees).

If your business is audited, having clean books from the start reduces the time spent responding, and decreases the chances of incurring penalties for incorrect filings or late payments.

Some bookkeepers also offer payroll services. Combining bookkeeping and payroll services can simplify both processes — payroll data flows directly into your bookkeeping system, which can reduce errors in the books and keep everything consistent. 

5. To get timely access to your financial data

Do you check your financial records consistently? There are a few instances where having up-to-date financial reports is especially helpful:

Monitoring your cash flows

Checking your cash flow can help you ensure that you have the funds you need to operate smoothly, and that cash is collected from sales in a timely manner. Cash flow is an important aspect of a business’s financial health.

Understanding your profitability

Profitability is often reviewed annually, but checking your statement of profit and loss monthly can help:

• Spot any trends or patterns that occur during the year

• Understand which products or services are performing well, and when

• Identify any issues early, such as unexpected increases in costs

Supporting decision-making 

Understanding your monthly cash flows and profitability is the basis for strong decision-making throughout the year. This can look like:

• Making the decision to grow your team 

• Finding more effective ways to manage your cash flow 

• Deciding whether to accept an offer or contract

• Making pricing decisions 

• Finding ways to reduce business costs

Further reading, including financial data you can use: Pro Tips: Making the Most of Your Partnership With Your Bookkeeper

A bookkeeper is your partner in supporting your growing business

Your business needs clean, accurate books, and as a business owner, you need time savings, financial clarity, and a reliable partner that you can count on.

As a bookkeeper, my goal is to lean into my skills and expertise to provide exactly that. I aim to take this important role off your plate, and to help you feel supported as a business owner. 

Whether you’re thinking of working with a bookkeeper for the first time, or if you’re wondering what a change might look like, I’d love to connect. Click here to start the conversation with a free evaluation of your books, and let’s discuss how I can best support you.

Want to know more about working with a bookkeeper? You might enjoy: 

• What Is a Bookkeeper? A Simple Guide for Small Business Owners

• How to Work With a Bookkeeper: Supporting Your Business and Streamlining Your Financial Systems

• 6 Questions to Ask Your Bookkeeper to Build Financial Confidence and Clarity