If you’ve just started your business, you’ll be trying to figure out a few essential items. Bookkeeping is a primary requirement for managing a business, but it is also one of the most challenging and time-consuming management aspects.
Identifying your bookkeeping service choices and the bookkeeping prices will go a long way toward ensuring your organization’s ultimate success.
Accounting vs. Bookkeeping
The first step is to decide your company’s requirements. In the beginning, almost every small business needs some bookkeeping. You’ll be primarily concerned with more minor responsibilities like logging transactions and paying bills at this point of your business’s growth.
If the company expands, you’ll have to devote more time to comprehensive financial reporting and adhering to state and federal regulations. This necessitates a more concentrated effort as well as close supervision by a trained professional. You’ll need the assistance of an advanced accountant to bring together the financial data you’ll need to make sound business decisions.
Before you go out and recruit a full-time bookkeeper, you need to understand what kind of duties you need to delegate. A full-time accountant is preferable to a part-time bookkeeper because they require less supervision and have more experience across the board.
An accomplished accountant’s compensation requirements are usually higher. But, investing in a good bookkeeping service is a move that guarantees “Return of Investment,” especially while expanding your company. Their ability to provide feedback via financial analysis and reporting will help you improve your company’s profitability.
What Are the Responsibilities of a Bookkeeper?
A bookkeeper for a small business typically has a few simple duties. They are in charge of keeping track of your expenses and earnings to keep your financial books in order. This is done by inserting information into accounting software.
In essence, their role is to keep track of financial transactions and compile data into a general financial statement that company owners can use to make significant decisions that help the company expand and prosper.
Regularly, bookkeepers are asked to perform a variety of other tasks. Here are some of them:
- Entry of data
- Paying the bills
- Monitoring Inventory levels.
- Preparing and document Invoices
- Reconciling the books (bank accounts & credit cards)
- Keeping track of vendors and clients (accounts payable and accounts receivable)
- Organizing and preparing key financial statements
- Receiving of and documenting all payments, including the overdue ones.
Salaries of Bookkeepers and the Cost of Outsourcing
Many newly founded companies chose to do their bookkeeping in the early stages of their operations, a cost-conscious move. However, the company will eventually demand more of your attention, and bookkeeping will need to be outsourced. Below are some of the factors you need to be mindful of, aside from bookkeeping service prices.
- The level of expertise of the bookkeeper
- Service provided
- The type of effort involved (daily/monthly hours required)
- The types of roles involved
- The willingness and capacity of your business to fund this service
Bookkeepers earn between $37,000 and $47,000 a year on average. You would almost certainly be required to pay for the employee’s benefits, such as insurance, holidays, and sick time, on top of the hourly costs.
The average cost of an in-house bookkeeper increases significantly as a result of these statutory perks. Because of the high costs of in-house bookkeeping, many businesses now outsource their bookkeeping to a third-party firm.
The bookkeeping prices offered by third parties are significantly lower than those charged by in-house bookkeepers. They increase depending on the number and complexity of services provided.
Not every corporation has similar bookkeeping requirements, and those requirements are likely to change as the company grows.
Part-time bookkeepers and outsourced bookkeeping services are good options for new businesses, while full-time bookkeepers are more beneficial to existing businesses. It is up to the company’s decision-makers to decide the most effective approach for maximizing profitability and ensuring growth.