Financial management plays an essential role in the growth of a business. You have to spend your money wisely and keep a healthy cash flow at the same time. As your company grows, financial responsibilities increase, and trying to handle everything by yourself might give you a hard time. When you’re in such a situation, you could efficiently use business bookkeeping services to handle your company finances.
But before going straight ahead into hiring a bookkeeping company, it will be helpful to consider a couple of significant factors in hiring the right people. Do you need a bookkeeping firm or a bookkeeping freelancer? What are your bookkeeping expectations, and what services do bookkeepers provide? How can you recognize a reliable company? These are some essential points you should ponder about.
Let us go over the basics of bookkeeping first and make the final decision after.
What Are Bookkeeping Services?
A bookkeeper takes charge of the overall management of a business's financial processes. They’re responsible for promoting a secure, healthy budget and uniformity in the company's financial tasks.
Some of the jobs done by a bookkeeper include (but aren’t limited to) the following:
- Handling regular account management
- Tracking and processing financial transactions (deposits, payroll, payables, receivables, and more)
- Creating an accounting data file that conforms to your business needs
- Producing consistent financial reports every month
- Bookkeeping and tax preparation services, such as noting changes in taxes and withholding
- Conducting bank statement reconciliation to ensure accuracy of the account balance
- Assisting in IRS audits/reports
- Reviewing and issuing reports to solve critical issues and maintain bookkeeping accuracy
Bookkeeping vs. Accounting
Bookkeeping and accounting are commonly thought to be one and the same. While both matter greatly to a business, they have a significant difference you should understand.
Bookkeepers handle administrative and transactional tasks, such as payments, receipts, and sales. Accountants, on the other hand, interpret, analyze, and report insights from the bookkeeping data.
How to Know If You Need a Bookkeeping Firm
Even though bookkeeping services are considered a business necessity, you might still wonder why your business, in particular, needs them.
There are two main types of bookkeeping services: firm and freelance. It’s best to have justifiable reasons for choosing to hire a firm instead of a freelancer. Here are some key differences.
Freelance Bookkeeping
Freelance bookkeepers are suitable for simpler processes. Compared to bookkeeping companies, they charge lower hourly or flat rates. Note that they have more freedom with their schedule. It means they won’t be regularly available and you’ll have less control over their working hours. You also need to make sure that they’re using the same bookkeeping tools as your company.
If you’re looking for a freelancer, it will be great to work with one who is experienced in businesses like yours. They should also be attentive to details to avoid errors and miscommunication.
Bookkeeping Company
On the other hand, a firm has diverse bookkeeping teams to offer instead of just one person. A bookkeeping firm, unlike a freelancer, is regularly available to work with. However, you will need to pay more, usually an hourly or monthly charge. Since they have a range of bookkeepers, their expertise may vary, so it's crucial to know about their capability beforehand.
Now that you know the differences between bookkeeping services, let's find the right people.
Characteristics of a Good Bookkeeping Company
If you're looking for a reliable company for bookkeeping services, here are factors to consider when making your hiring decision.
Day-to-Day Availability
One of the primary characteristics of bookkeeping companies that set them apart from freelancers is availability. They have multiple employees, so they’re less likely to leave you hanging.
Excellent Communication
Communication is key, and that applies to financial management too. Find a company with excellent bookkeeping support services. They should discuss the most complex matters in easily understood ways, listen to your opinions, and be proactive in following up.
Upon your first consultation, see if the company asks for vital business information that will help them provide a good service. They should respect your pace of learning and adjust accordingly to it.
Updated Technological Know-How
Look for a company that uses the latest business software to best accomplish bookkeeping tasks. If data is needed to create a bookkeeping and tax services business plan, your bookkeeper should use tools that accurately process income statements, expense receipts, tax deductions, and more. The tools they use show how much the company wants to be as efficient a bookkeeper as possible.
Industry Experience
Bookkeepers with extensive experience in your industry certainly have more to offer. When it comes to ensuring secure, healthy finances, they provide customized reports for your niche. From bookkeeping tax services reports to key performance indicators fitting your industry, hiring bookkeepers with industry expertise is a smart move.
Bookkeeping Certifications
Certifications are not legally required for bookkeeping. However, it's still helpful to ask for these documents since they reflect their expertise level. You can ask for either an American Institute of Professional Bookkeepers (AIPB) certification or a National Association of Certified Public Bookkeepers (NACPB) certification.
Conclusion
Finding a good company for bookkeeping needn't be difficult. However, it will be helpful if you understand the essential information about bookkeeping before sealing the deal. Overall, having bookkeeping experts help with your business finances is good, so do not hesitate to look for one!