The Benefits Of Hiring A Bookkeeping Firm Over A Solo Bookkeeper

The Benefits Of Hiring A Bookkeeping Firm Over A Solo Bookkeeper

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The Benefits Of Hiring A Bookkeeping Firm Over A Solo Bookkeeper

At some point in their evolution every small business owner realizes their company has grown to the point where bookkeeping assistance is needed. At that point the tendency is often to search online for bookkeepers in your geographic area and hire the first freelancer who agrees to come in for a few hours every week to handle things.

You may get lucky. The person you hire may be well trained, experienced, honest and diligent and get the job done for you.

But you may also run into problems that could be avoided if you reached out to a professional bookkeeping company.

There is no question that selecting a bookkeeper can be daunting and in a perfect world, the freelancer will tell you right if she or he is capable of doing the job you need. But that is not always the case.

Issues with hiring freelancers

In Canada, any individual looking for work can purchase accounting software, print up some business cards and call themselves a bookkeeper. They do not have to be certified, they don’t have to pass any specific examinations or take any specific courses.

If they agree to do the job for you and they aren’t sufficiently qualified, they can cost your business a lot of money in time needed to correct entries, recover from poor financial planning advice, and government penalties incurred from incorrect filing of GST/HST and income tax based on the information they compiled or filed.

Most freelancers that you will find are likely what is known as data entry bookkeepers (DEB). They may know how to do the basics of invoicing, applying payments, and writing cheques. However, they do not have the in-depth accounting knowledge to know how your software works with debits and credits, troubleshooting, correct reconciliation techniques and reporting.

Many business mistakenly assume that all bookkeepers are full cycle bookkeepers, but instead they end up with the DEB.

Importance of the Full Cycle Bookkeeper

On the other hand, a Full Cycle Bookkeeper is qualified to serve as a liaison between you and your Certified Public Accountant (CPA). They perform everything, from accounts-payable and accounts-receivable, payroll, data management, and account reconciliations to recording journal entries, creating detailed financial reports, providing software training and interfacing, and working with your CPA to ensure that your taxes are filed correctly and on time.

Today’s Full Cycle Bookkeeper is current with all the cutting edge technologies to help small business owners make better financial decision and are able to use fantastic emerging technologies that can also save you time and money.

At AIS Solutions, for example, we have significantly decreased the need for manual data entry, and that has greatly reduced human error. If occasionally some minor data entry is needed, we use a Data Entry Technician, a person who is training to be, but not yet considered to be, a senior Full Cycle bookkeeper.

Ensuring high levels of competency

As a bookkeeping company, we cannot risk having bookkeepers that are not all trained to the high level of competency our customers need. So in an unregulated industry, we introduced our own regulations. We created our own in-house examinations, both written and practical.

Before we hire a new bookkeeper to become a member of our team, they must score 80% or better on each of our examinations. We have now made these examinations available to other small business owners, so if you would like to test your own bookkeepers, please visit our Online Bookkeeper Training and Testing site.

Because of this, our Full Cycle Bookkeepers are able to manage a client’s books more completely and correctly, and more efficiently, which saves them money in the long run. Efficiency and accuracy allow our clients to make better business decisions based upon real time accurate financial information.

Other advantages of bookkeeping companies

Bookkeeping companies offer other advantages over freelance bookkeepers. Companies like AIS Solutions, for example, ensure that a minimum of two people are familiar with each client file, so if an issue arises and one person is sick or on vacation, the matter can still be dealt with quickly and efficiently. This also allows us to ensure continuity with each client, even if a staff member were to retire or move away. No more excuses for delays in getting things done on time.

By storing financial data securely through Cloud technology, the business owner also has access to all the latest reports and data 24 hours of the day, seven days of the week on any device – laptop, tablet, smartphone – wherever in the world there is online access.

Companies know that small business owners do not work traditional hours and sometimes they want to go over their financial updates on Sunday morning or Tuesday at midnight. We just need to ensure that it is there when it is needed.

How do you know outsourcing your bookkeeping to a company is right for you?

To ensure that you make the right bookkeeping choices for your company, it is a good idea to do a cost-benefit analysis of outsourcing your bookkeeping to a company.

To do that, start by compiling a list of the bookkeeping tasks that you don’t do well. Estimate the number of hours that you spend on each of these tasks every week. Calculate how much this is costing your business (number of hours times your hourly rate).

Is the number representing good value to your business?

Mistakes happen, particularly if you are not a trained bookkeeper. Think about what one error in filing can cost you in CRA penalities.

Are you sure you are taking all of the HST input tax credits (ITC) to which you are entitled? AIS Solutions have saved their clients thousands and thousands of dollars over the years by insuring every credit is taken to which the company was legally entitled.

Be honest with yourself. Like most business owners, you did not go into business do your own bookkeeping. What could you do in that same amount of time that would benefit your business more than having you do bookkeeping?

Examine the option of a full-time bookkeeper

To complete your cost analysis, consider the cost of having an internal staff bookkeeper.

Assuming there is a base salary of at least $40,000 a year (the current average is much higher), you also need to calculate the other costs of sustaining an employee.

These include at least two weeks of vacation each year ($1,600 for the employee above), statutory holidays off (another $1,112), sick leave of an industry average of five days a year ($556), Workers Compensation Insurance (estimated $1,200), Payroll Tax ($2,948) and recruitment (based on industry average of around $5,000 per employee).

Putting it all together, it amounts to about $49,916 per year.

We also put our money where our mouth is by offering a money back guarantee. If you use our services for 60 days and are not convinced that you are saving money or time, we will refund all of your fees.

When you face bookkeeping challenges, it is best to gather the facts before you make your final decision.

Please complete our questionnaire here and let’s have a no obligation discovery call to see how we can help you save money and time and start making informed business decision by relying on accurate, real-time financial information.

Thank you for taking the time to read our post. Until next time take care.

This blog is for you and we hope you will enjoy the content.

Please let us know if there are any specific topics you would like us to address in the future.

Copyright: antonioguillem / 123RF Stock Photo

Steve Loates

About The Author

Steve is the co-owner of AIS Solutions and Co-founder of Kninja Knetwork. In 2017, his firm was named Intuit's Global Firm of the Future, the first time the title has ever been awarded to a firm outside of the United States. He has also has been named as one of the Top 10 Influencers in the Canadian Bookkeeping Industry. He has been a small business owner for over 30 years and has helped to develop a number of businesses including bookkeeping, online training, digital marketing, website development, e-commerce and retail. Steve passion is educating and supporting small business and when he is not creating online courses he is delivering workshops and webinars across North America and the Caribbean including presentations at QB Connect, Connected, IPBC, CPA The One and Scaling New Heights.

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