3 Things You Absolutely Need To Consider When Hiring A Bookkeeper
Do you find as your business evolves, your bookkeeping responsibilities have become more complicated and time-consuming? Perhaps what once was a tameable toddler-like time-gremlin has become a hulking gorilla looming over your shoulder at the end of every month? Plenty of business owners eventually find themselves in this situation. And now, it's time to start thinking more seriously about hiring a bookkeeper.
After the first initial years of setting up shop, many small business owners find they’re spending a lot more time and focus on bookkeeping tasks than they’d like to. What they'd rather be doing is putting that energy into product or service development and delivery.
Often, it's about three or four years after opening a business when small business owners start to ask themselves one particular question: Would outsourcing their bookkeeping be more efficient and effective than continuing to wrestle the gorilla in-house?
Are you wondering about that very thing? Then hopefully you're also thinking about how to hire the right bookkeeper rather than just any bookkeeper. Fortunately, you're in the best place for answers.
Hiring a Bookkeeper: 3 Key Considerations
Partnering with a virtual bookkeeper frees you to hand off your books and get strategic insights from a trusted expert to boot. You get to send the gorilla packing! Now, you can say hello to more time to do what made you go into business in the first place, with a professional bookkeeper on your side to help you identify what’s working and what’s not.
Relying on a bookkeeper makes things easier and more accurate, too. Plus, working with a virtual bookkeeper is typically much less expensive than hiring an employee to tackle the tasks in-house.
Read about the actual cost of keeping your bookkeeping in-house next.
How to Hire a Bookkeeper (The Right One for You!)
So, that brings us to our following two questions. How do you go about hiring the right bookkeeper? And what differentiates one bookkeeping agency from another?
Here are three of the most important benchmarks to keep at the forefront of your mind when choosing a bookkeeper:
Their business model
How they structure their pricing
How they communicate
These may seem unrelated, but in reality, they go hand-in-hand.
Business Model Processes VS. CPA
CPA training equips individuals to excel as practitioners in tax, finance, and audit. But the credentials of a CPA don’t automatically equip someone to run an excellent customer service organization.
What you need to get an understanding of is:
What processes are in place to make sure you get your financials on time
How they track to make sure things that need to be done to keep you current are being done consistently
What kind of controls they have for their employees
Also, do they have a weekly, monthly, quarterly, and annual checklist in place to keep you running? This way, you can eliminate variables and reduce the potential for errors. Further, what kind of failsafe system do they have in place in case whoever manages your account leaves, gets sick, or cannot fulfill their duties?
The CPA business model is generally geared towards exchanging time for dollars instead of being outcome-focused. Among the biggest drivers of an outcome-focused business model? Process orientation and customer service prioritization. This means they are far more focused on helping you get what you need than on mere compliance, regardless of the time it takes.
Hiring a Bookkeeping with Value-Based Pricing Vs. Hours-Based Pricing
Speaking of processes, customer service, and the time it takes to deliver these consistently with excellence, it’s important to look at how a bookkeeper structures their billing. Bookkeepers typically structure pricing either on the estimated value they are providing you or on the hours they clock working on your books.
Hours-based pricing
Hours, or cost-based pricing, is calculated on a set rate per service, per amount of time spent. Let's say that one month, your bookkeeper spends six hours reconciling your books rather than the more typical four or five hours. Then, you’re billed for six hours at the end of that month. As such, your bill fluctuates each month even though your bookkeeper is delivering the same services.
Are you curious about using AI in place of hiring a bookkeeper? Read this first.
Value-based pricing
Value-based pricing gives a fixed price up-front, calculated on the estimated value you’ll receive. Let's look at the same scenario of six hours to reconcile your books for one month with value-based pricing. In this case, you still pay the same price for that service, even though it requires more time from the bookkeeper that month. Your bill remains the same each month based on the services you’ve signed up for.
The bottom line to consider with these two pricing models is one of the biggest perks of turning over your books to an outsourced bookkeeper. That is, you no longer have to stress over how many hours it might take to reconcile your books. That stress remains if you’re being billed for each of those hours for someone else to do it.
The Perks of Hiring a Bookkeeper on a Fixed-Fee Basis
When you pay by the hour, your bookkeeper is incentivized to take longer. Settling on a fixed fee basis incentivizes your bookkeeper to get the work done in a timely and efficient way. Plus, you won’t feel the urge to cringe when you open your monthly bill.
Unlimited Support
If your bookkeeping service has a fixed-rate, value-based pricing model, you don't need to be concerned about how frequently you contact them to ask questions about your books. You are not being billed each time you call, email, text, or drop by, or by how long those conversations last.
Open Communication
Your bookkeeping services will still be given the same time and attention each month, no matter how often you need to reach out. Unlimited, open communication is inherent in the value of the financial services you’re paying for—it's not considered a cherry on top that costs extra.
Verify when you get a price estimate for outsourced bookkeeping services this is indeed the price you’ll see on your bill each month. No surprises, no hidden fees, or extra charges because you contacted your account manager four times instead of three or because you talked for 20 minutes instead of 10.
Scalable Services
Without that hulking stressful gorilla of bookkeeping looming over your shoulder, you’ll likely find yourself able to focus with more clarity on the tangible tasks of growing your business.
New questions may emerge that you now have time and energy to address. For example, where you might best invest resources for the next quarter or how to streamline expenses. You may also find passing off assistant-level tasks such as scheduling or gathering data would help you be even more productive.
A bookkeeping service that offers scalable offers such as certified financial advisory for the big picture or assistant services for the everyday tasks side of the business helps you and your staff be even more effective and efficient.
Just be sure any scalable services a bookkeeping company offers, such as CFO Advisory, are also on a value-based pricing structure.
Quarterly consultations to talk about strategic decisions, company vision, and your goals and concerns for the future can help you stay on the fast track to success. Plus, assistant services such as inbox optimization, calendar management, and handling other time-consuming tasks free up even more time to focus on doing what you do best—running your business.
Let's Talk More About Hiring a Bookkeeper from Two Roads
If you’d like to better understand just how beneficial outsourcing your bookkeeping might be and how it can accelerate the growth of your business, let's chat today. We’d love to talk with you about how we can help you achieve your vision for your business.
Learn more about us here, call us at (865) 212-0063, or schedule a call online.
Did you learn a lot about hiring a bookkeeper in today's post?
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This article was updated in 2023 just for you.