Should I Hire a Bookkeeper? Here’s when to bring in financial support

 For many entrepreneurs, handling business finances can feel like a daunting task. You might wonder, “Do I need to hire a bookkeeper, or should I handle it myself?” It’s a crucial question, especially as your business grows, and it can greatly impact your financial flow and overall mental well-being.

In this article, we’ll explore when the right time is to hire a bookkeeper by breaking down the pros and cons of each approach. Plus, I’ll share my top recommendation for finding that sweet spot to bring in financial support with ease, flow, and joy.

Why is hiring a bookkeeper important?

Like any investment in business, the decision to hire a bookkeeper comes down to the return on investment (ROI). But ROI doesn’t just mean monetary returns, it could be saving time or even safeguarding your mental health. Let’s dive deeper into the three key returns you should consider when thinking about hiring a bookkeeper (one's I use a lot):

• Time: Is hiring a bookkeeper saving you time, allowing you to focus on income-generating activities?
• Money: Will this investment ultimately help you make more money by providing accurate, timely financial insights?
• Mental health: Is outsourcing this task going to reduce your stress and help you stay in a calm, productive flow?

These are essential questions to ask when weighing up whether to hire a bookkeeper.

What does a bookkeeper do?

In simple terms, a bookkeeper manages your day-to-day financial records. They ensure all your transactions are reconciled in accounting software like Xero or QuickBooks, categorising your income, expenses, and tax obligations. Their role is critical not only for maintaining compliance but also for keeping a pulse on your business’s financial health.

A bookkeeper can:

• Reconcile all your bank transactions.
• Categorise and track income, expenses, and taxes (e.g., VAT, GST).
• Ensure your financial records match your bank account and catch any errors or fraud.
• Help you prepare for tax obligations like VAT or GST returns.

While it might seem like a small, back-office task, having an accurate, up-to-date view of your financials can help you make informed decisions to grow your business.

When should you hire a bookkeeper?

Now, let’s talk about the three common approaches business owners take when deciding whether to hire a bookkeeper.

1. Outsourcing immediately

Some business owners decide to outsource their bookkeeping right away, which can be a great option if you want to focus entirely on growing your business. The pros of outsourcing immediately include:

• It gets done: Your books are taken care of by a professional, meaning you don’t have to worry about it.
• Time-saving: You free up time to focus on sales, marketing, and scaling your business.
• Less stress: You won’t have to deal with the discomfort of managing your numbers.

However, the cons of outsourcing early include:

• Cost: Bookkeeping services can be expensive, especially in the early days when every dollar counts.
• Lost opportunity to learn: By outsourcing, you miss the chance to understand how money flows through your business, which could help you make better financial decisions in the future.

2. Giving it a go yourself

The second approach is to do your own bookkeeping. This can be a great way to save money in the early stages and give you a chance to learn the ins and outs of your finances. The pros include:

• Saving money: You’re not paying someone else to do your books, which leaves more cash for other investments.
• Learning opportunity: By handling your own books, you’ll become more familiar with how your business operates financially. You’ll learn to celebrate wins (like incoming payments) and notice areas for improvement (like unnecessary expenses).

But, the cons are:

• Mistakes: If you don’t have the right training or understanding, you could make errors that will cost you time and money later. Incorrect tax filings or reconciliations could lead to more costly clean-ups.
• Time-consuming: It can take up a lot of your time to manage your own books, especially if you’re not familiar with the process. This might distract you from other important tasks, like generating sales.

3. Ignoring it altogether

The third, and not-so-great, approach is to simply ignore your bookkeeping. While this might feel like a time-saver in the short term, it’s a dangerous road to go down. The illusionary pros include:

• More time for other tasks: You’ll have more time to focus on marketing, selling, and branding.

However, the cons far outweigh this:

• Last-minute stress: You’ll eventually have to deal with the mess, whether it’s at tax time or when cash flow problems arise.
• Potential penalties: Ignoring your numbers could lead to tax penalties or compliance issues, not to mention the possibility of cash flow crises.

My recommendation: When is the right time to hire a bookkeeper?

So, when should you hire a bookkeeper? My recommendation is to bring in a bookkeeper when you feel confident and comfortable with your numbers, but your time is better spent on other tasks that directly generate income or growth. This means you’ve had enough time to learn how your business operates financially, and now you’re ready to focus your energy on higher-value activities.

By this stage, you should:

• Understand your numbers: You’ve taken the time to do your own bookkeeping, so you know how money flows through your business.
• Feel empowered: You’re making an informed, CEO-level decision to hand over the bookkeeping to free up your time, not out of fear or avoidance.

This is the perfect sweet spot where outsourcing will free up your time, but you’ll still have a good grasp of your financials to make smart, data-driven decisions.

Final thoughts

Hiring a bookkeeper should feel like a powerful, intentional choice. You want to hand over the reins only when you’ve mastered your numbers and are confident in your financial foundation. At that point, the decision to outsource becomes a mindful investment in your business’s future growth.

Take control of your business finances, lean into the numbers, and remember: when you care about your money, your money will care about you.

Resources

 Listen to the podcast asking the question "Should I hire a bookkeeper?" 

 Get started with my self-paced course "The Finance Fix"