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Bookkeeping services for small businesses

For those who run a small business, it can be tempting, especially early on, to manage your own bookkeeping needs. While this is certainly possible, it requires diligent effort and precision. Mistakes or oversights can cause problems for the business—potentially even hefty penalties for errors, whether accidental or not. This makes keeping track of all your receipts, records, and other relevant data vitally important.

One of the biggest downsides for managing your own bookkeeping functions is time consumption. If you’re already running your business, taking on what is often the workload of at least one dedicated professional can prove challenging, to say the least.

Especially if you don’t have professional bookkeeping experience, the processes connected with organizing and analyzing financial data can be daunting—even with top-of-the-line bookkeeping software. 

And if you’re doing the bookkeeping, as opposed to a pro, who can you turn to for advice?

At the end of the day, if the workload associated with basic business bookkeeping compromises your ability to focus on the rest of the business’s needs, it’s a recipe for being overwhelmed (if not worse). Instead of spending so much time figuring out the ins and outs of bookkeeping, and risking costly mistakes, it may be time to consider hiring a professional bookkeeper.  

What is bookkeeping, and why is it important?

Simply put, bookkeeping is how an organization tracks and documents any/every type of financial transaction a business may be involved in. Professional bookkeepers use a variety of tools, usually centralizing operations with bookkeeping software or physical spreadsheets or ledgers.

How does bookkeeping help a business? Bookkeeping is a vital component of daily operations for businesses of all types, sizes, and industries. When bookkeeping paints an incomplete or inaccurate picture of the business’s financial health, it hinders leaders’ ability to make data-backed decisions. 

What does a bookkeeper do on a daily basis?

On a daily basis, bookkeepers are tasked with processing and recording any and all transactions. Their daily activities may include:

  • Recording day-to-day financial transactions in a ledge or bookkeeping software system
  • Producing and following up on sent invoices
  • Managing bookkeeping software
  • Preparing financial statements (like balance sheets or cash flow statements)
  • Maintaining budget records, historical and present
  • Managing and processing payroll
  • Monitoring accounts receivable
  • Creating cash flow statements for the business

Note that depending on the company, a bookkeeper may or may not do each of the above activities—some may be assigned to an accountant, if applicable. Additionally, several factors impact what level of bookkeeping is needed, mainly depending on complexity—business size and overall volume of transactions. And the bookkeeper must ensure adherence to the IRS requirements for documenting business transactions.

The data generated by these activities provides a quick snapshot of the business’s financial health and standing, and ultimately becomes part of monthly, quarterly, or annual statements.

Bookkeeper vs accountant: What’s the difference?

Sometimes used interchangeably, it’s worth pointing out the differences between bookkeeping and accounting. 

For companies that employ both, a bookkeeper generally documents and maintains financial transaction records, and then accounting handles more of the analysis and interpretation of the data. Small to mid-sized organizations tend to have at least one bookkeeper, whose work is then reviewed by an accountant while being finalized for monthly, quarterly, or annual financial reports. Bookkeepers track the raw information used by accountants to prepare and file annual taxes.

Do you need a bookkeeper, an accountant, or both? 

Whether you need a bookkeeper, an accountant, or both depends largely on the industry, as well as the level of expertise needed. Accountants are essential in industries with particularly complex financial systems, especially large transactions, or both. 

What is a certified public accountant, and do you need one? 

A certified public accountant, or CPA, is a specially licensed public accountant. To earn this credential, an accountant must meet rigorous standards, fulfilling “three E’s” of education, exam, and experience. A CPA must earn a 4-year degree (with minimum coursework hours in accounting and business and 150 credit hours of general education), pass the four-part Uniform CPA Examination, and have one or more years of relevant accounting experience. 

While accountants can do much of the work needed to create audited financial statements (like balance sheets or income statements), only a CPA can formally create the audited statements required for tasks like providing representation through a tax audit. This is crucial (and required) for companies that sell shares on the stock market. 

Bookkeeping certification and qualifications

A full, four-year college degree isn’t typically required for a bookkeeper, though some college experience is preferable. Unlike a CPA (who handles the accounting side of operations), bookkeeping does not require any particular license. However, the National Association of Certified Public Bookkeepers (NACPB) does offer a Bookkeeper Certification that consists of an Accounting Fundamentals course and the Uniform Bookkeeper Certification Exam. 

The American Institute of Professional Bookkeepers (AIPB) also offers Certified Bookkeeper status. This certification requires two years of on-the-job experience and exam completion, and the candidate is also required to sign the AIPB Code of Ethics.

Cost of bookkeeping services for small business

Many variables will impact the bottom-line impact of hiring a bookkeeper for your business. Smaller, newer businesses may be able to get by with a bookkeeper for a while, but as the business grows, it becomes more difficult for a bookkeeper to give detailed financial reporting the time and focus it requires—especially when it comes to conforming to state and federal regulations. 

What is a bookkeeper salary?

While bookkeeping salaries will vary depending on factors like education, certification, and experience, according to Salary.com, bookkeeper salaries range from $39,290 to $50,218. The average bookkeeper salary in the US is $44,767.

There are a few different types of bookkeeping you might decide to employ, depending on the business needs and budget considerations. These are in-house bookkeeping, freelance bookkeeping, and outsourced bookkeeping.

In-house bookkeeping 

The salary cited above for in-house bookkeepers works out to an hourly rate of roughly $21.50. This is in addition to routine, expected costs associated with onboarding—including benefits, training, and time off. 

Freelance bookkeeping 

Freelance bookkeepers represent a highly-affordable option for organizations with relatively straightforward financial operations. Depending on the type of work, a freelance bookkeeper may charge an hourly rate or a flat rate. A freelancer may either be a local hire with the ability to work in-house (with the rest of the business), or a remote hire in cases where the work can be completed online through digital channels.

How much do freelance bookkeepers charge?  Most freelancers will charge by the hour. Therefore, the amount you’ll need to spend for a freelance bookkeeper depends on a number of factors. For example, rate data from state to state tends to vary based on the state (e.g., Florida’s average hourly rate is $15.60, while New York’s is $21.25), the freelancer’s education level and applicable certifications, their experience, and the types and scope of bookkeeping services needed.

Outsourced bookkeeping 

Outsourcing to a bookkeeping firm means hiring an outside group, made up of many bookkeepers, to handle the entirety of your bookkeeping. Whether you’re looking to outsource bookkeeping due to a lack of time or know-how—or just an urgent desire to get the numbers right (and avoid costly mistakes)—outsourcing may be the answer for you.

While this option costs more than hiring one or more freelancers, it also comes with many, many benefits, including expertise, experience, professionalism, and accuracy.

When outsourcing to a bookkeeping firm, it might make sense to utilize a remote or virtual bookkeeper. What are virtual bookkeeping services? These options leverage cloud-based software to connect your business with one or more bookkeeping professionals, representing a more affordable take on outsourcing to a firm. Typically, remote or virtual bookkeepers will rely on automation to handle manual, routine work—saving time and reducing the possibility of human error. 

How much do virtual bookkeepers charge? When it comes to budget considerations, hiring one or more virtual bookkeepers comes with immense cost savings over traditional bookkeeping methods. Like freelancers, they’re not direct employees of your company, which reduces costs—including office space and supplies, employee benefits, and social security and unemployment taxes. Virtual bookkeeping offers the flexibility to only pay for the services you need, as opposed to paying a full-time employee salary.

Finding the right bookkeeper for your business

The main factors to consider when evaluating bookkeeping options for your business include your business needs and the state of your budget.

  • Business needs. Are you in a position that requires simple bookkeeping or more complex financial details? The more complex or voluminous your business’s transactions are, the more likely you need to outsource to a team of professionals. 
  • Budget. It’s important to balance the business needs with bookkeeping providers’ services and strengths. You don’t necessarily need every service a firm can provide, so “shopping around” can help you find the right firm for your specific needs. 

Get it right with Delta Wealth Advisors

When it comes to bookkeeping, you don’t have to go it alone.

Not limited to just bookkeeping, we offer a full suite of accounting, tax, and consulting services. We offer monthly and quarterly bookkeeping services, including invoicing and payroll preparation. And we’re also ready to help with compiling, reviewing, or auditing your financial statements, as well as wealth management and working through tax liabilities. 

Unlike some other bookkeeping service options, at Delta Wealth Advisors, we believe in true collaboration—so you can run your business, and we can make sure the financial side keeps humming along.

If you’re still wondering, “Should I hire a bookkeeper for my small business?” or just want to learn more about how we can apply our experience and expertise to your unique business needs, reach out to us today!