Why Hire a Bookkeeper?

A lot of small business owners prefer to do the bookkeeping them selves, which is great if you have a good understanding of what you are doing and the implications of doing it wrong.  There are a few reasons you might want a little help with your books, and there are a few options that you have when working with a professional.  Here are just four reasons why a professional might be helpful:

1.  CPA's charge A LOT more then a bookkeeper.   At year end, if your Accountant has to do a lot of work to get your financial documents in order for the taxes, they are going to charge an arm and a leg.  A bookkeeper is going to charge significantly less to do the same work.  A bookkeeper can help through out the year so that you are not incurring such a large expense at one time.

2.  A little support can go a long way.   You could resume your normal day to day operations, and focus on growing your business rather then deal with something that is not your specialty.    This will give you the opportunity to focus on the business that you are passionate about.  You would hire a contractor to do physical upgrades to your business, why not hire a professional to help you with the financial side of the business?  The consequences of errors can be great.

3.  Save Time and Money.  If you are not focused or not organized, you can make mistakes, and might have a hard time finding those mistakes later on down the road.  If you miss expenses, there will be tax implications.    If you are missing important info regarding those expenses, and an audit comes up, you might have trouble if you have not properly recorded the information.   The more time that you, the business owner, spends on these matters, the less time you are spending  finding new business, or expanding upon your current business.

4.  You might be missing something important.   If there is a category you don't quite understand, a professional might be able to help you sort it out. A professional can help you determine if there are other expenses that you should be including in your books.  You might also be misrepresenting your financial documents.  If you hire a professional you know that it will be done right, and you can get a better snap shot of what is going on with your business.  Are you really as profitable as you thought you were?  Are there areas that clearly need improvement, now that you have a better idea of what is going on financially?  Is your business doing better then you thought it was doing?

Some things you might want to consider:  You don't need to hire a professional to do everything for you.  You can hire someone just enough to help supplement what you are already doing.  You might be comfortable with the invoicing and the accounts payable, but some one can help with reconciliation, and financial document preparations. The right bookkeeper should give you service options, depending on what you are looking for such as:

On Site or Off Site Servicing
Weekly, Monthly, or Quarterly Assistance
Annual Help for Tax Prep
Consultation and Education, to help you get going in the right direction.
*See my list of services to get a better idea of your options

The Importance of Reconciliation

This may seem silly to many of you out there, but there are some people new to this that might find some of the information useful...

To begin a reconciliation on QB Online go to the gear icon in the top right of the page and click on reconcile.  Select the account you wish you reconcile, and enter the date and ending balance on the account.  Select each of the transactions that appear on your statement.  If anything is missing it should be entered at this time. The purpose of the reconciliation is to verify that all transactions are recorded in QB that the company had during the month.

If there are things that have been entered that have not cleared there are a couple of things that should be done.  First if a check was mailed, but has not cleared yet, then do nothing, it will most likely show up in next month's statement.    If the check was lost, it should be cancelled with the bank.   If it was cancelled it should be voided in the ledger (this will make it so the check still appears, but shows a $0 amount, therefore not effecting the ledger).  You could also delete the check, but it will not show in the ledger if this is done.  Also, this will show up in the audit trail.

If there is a deposit showing in QB that is not appearing in the ledger, you have to find out why.  If it is a duplicate entry, then it can be deleted.  However, you might have bigger problems if it was a deposit.  Did it go into the wrong account?  Did it never make it to the bank?  You will have to do some detective work to find out what happened and take the necessary steps to rectify it.

Each and every account should be reconciled on a monthly basis.  If there are very few transactions you could do it quarterly, but the more months are done at once, the harder it might become to find the issues.   Each bank account, and each credit card should be reconciled, to make sure that the proper balances appear on the Balance Sheet.

It is quite easy for a discrepancy to appear.  The first thing that you should do is confirm the deposits and the withdrawals.  This will help narrow down which transaction you are looking for.   If both numbers are off then it might be easiest to start from the beginning.  Go slowly.  If yo begin to get frustrated you can leave it and come back when you have a clear mind, as frustration can become a big obstacle.   There is a button for this on the bottom of the page.   When you return the everything will be exactly as you left it.

A good trick to use is to make a copy of your statement for you to write on (write on the original if you want, you can always get another copy off line.)  Use different ticks, or a highlighter to mark off that you have checked it off in your reconciliation. I don't recommend crossing it out completely, as you might have to go back and do it again, and it is easier if you can read what the line says.  Once you get in to the swing of things, you will figure out what works best for you.  Stick with that.

Good luck.   If you have any questions please feel free to contact me.  I would be happy to walk you through it or help you find where the discrepancy lies.