If you own an online business, you might want to hire a bookkeeper. But what can bookkeepers do? Whether you run an online clothing store or a food delivery service, keeping track of what goes on in your business is essential. A bookkeeper will help you do just that.
Below, we’ll explore what can bookkeepers do and why you may want to hire one for your online business. We’ll also answer some important questions on the subject.
What Does a Bookkeeper Do?
A bookkeeper manages your business’ finances by keeping sales records, preparing financial statements, filing tax returns, etc. Your bookkeeper may offer financial advice based on the data they collect every day. They may even help you process paychecks.
A good bookkeeper makes it possible for you to monitor your business’ progress and strategize accordingly with the help of accurate records and reports. They allow you to focus on other things like improving your bottom line and making sure your customers are happy.
Bookkeeper Responsibilities
Every business has particular bookkeeping needs. A bookkeeper’s responsibilities depend on the specific requirements they have been hired to fulfill. A bookkeeper might be asked to satisfy payroll and other HR tasks in a small business. This is not always the case but may be necessary due to the size of the business.
Regardless, there are some bookkeeping tasks that a bookkeeper is generally expected to fulfill:
Recording Daily Transactions
A bookkeeper will take charge of all of the data entry required to keep your records up to date. Every sale and purchase is carefully tracked and recorded. This data is then stored for future reference.
Preparing Financial Statements
A critical responsibility of a bookkeeper is preparing financial statements. These include a balance sheet, cash flow statement, profit and loss statement, etc. Financial statements help to provide relevant information to evaluate your business systematically. Your financial statements will show the cash flowing in and out of your business, your bottom line, assets and liabilities, operating expenses, etc.
Handling Accounts Payable
A bookkeeper will usually handle the payments for a small business. They may be payments made to suppliers or business expenses like office rent. The bookkeeper tracks and records these payments. A professional bookkeeper might also collaborate with a Toronto Tax Accountant to ensure that all financial documents are prepared accurately and in compliance with local regulations. For larger businesses, there may be a separate accounts payable team or department.
Preparing Invoices and Handling Accounts Receivable
Preparing invoices and sending them to your customers is also the responsibility of a bookkeeper. After payment has been received, the bookkeeper will then document the paid invoice.
Monitoring Accuracy of Financial Records
It’s crucial to catch inconsistencies between your books and business accounts. A bookkeeper will keep your records accurate. They will spot such discrepancies and correct them. A bookkeeper will be in charge of ensuring that you don’t run into problems resulting from inaccurate records, like during an audit or while filing tax returns.
Benefits of Bookkeepers and Bookkeeping for Online Businesses
Most successful businesses make good bookkeeping a priority. Here are some reasons why.
A Bookkeeper Can Help Increase Your Productivity
Handling paperwork can be tedious and time-consuming. It is also something that doesn’t necessarily have to be handled by the business owner directly. Hiring a bookkeeper lets you channel the time and effort used for paperwork into other more pressing concerns. This is one of the most significant advantages of hiring a bookkeeper.
Planning Becomes Easier
With more accurate records and detailed reports, it becomes easier to spot the trends that highlight the needs of your online business. You can then outline a plan to address those needs.
A Bookkeeper Can Help You Save Money
By keeping clear and detailed records, a bookkeeper makes it easier to navigate the waters at tax time. If your bookkeeping is done right, you’re more likely to get a tax refund than owe the IRS.
You are More Likely to Win Over Investors With Good Bookkeeping
Anyone who is considering investing in your business will want to know what they are getting into. Your books and financial statements are the tools they’ll use to evaluate your business. A bookkeeper will help highlight the positive aspects of your business and show where you need to direct money to improve overall success.
FAQ
Why Hire a Virtual Bookkeeper for Your Online Business?
If you don’t want to handle the bookkeeping yourself, you can either get an in-house professional to do it for you or hire a virtual bookkeeper. A virtual bookkeeper works with you to manage your business’ finances remotely.
Hiring an in-house professional may be the way to go if you have the cash to spare. It can be pretty expensive to add an experienced bookkeeper to your permanent staff. Besides the base salary, you must also consider benefits, compensation for extra work hours, bonuses, and the infrastructure needed to accommodate a new addition to your staff.
On the other hand, you can hire a virtual bookkeeper who is much less expensive without sacrificing quality. When you hire a virtual bookkeeper, you only have to worry about the cost of the monthly fees paid to retain their services.
Also, you get access to the latest tools and software without having to pay to own them. The virtual bookkeeping service is responsible for getting all the relevant software and materials. That’s one less thing for you to worry about.
A virtual bookkeeping service can also connect to your bank and pull transaction data straight from your bank and credit card accounts, so you don’t have to deal with paperwork.
Virtual bookkeepers are also usually more experienced in dealing with online businesses.
Hiring a virtual bookkeeping service saves you the hassle of finding someone who’s the right fit for your organization. Once you hire them, the bookkeeping service will assign a team of professionals to work with you.
How to Choose a Virtual Bookkeeper for Your Online Business?
There are a lot of virtual bookkeepers to choose from. If you’re going to find one that’s the best fit for your online business, there are certain things to be mindful of.
One is most certainly your budget and which virtual bookkeepers offer pricing plans that fit it. Depending on the number of transactions you do in a month, you will have to choose between a freelancer and a bookkeeping service. Freelancers tend to charge an hourly rate. Bookkeeping services usually charge a monthly flat rate. If you handle lots of transactions monthly, you may want to go with a bookkeeping service.
You also have to consider whether they have experience in your field or niche and what kind of accounting software they use to access your books. Naturally, you will have to become familiar with it. Most freelance bookkeepers use off-the-shelf software, whereas a bookkeeping service may have a specialized program.
As with any service offered remotely, it’s highly advisable to check customer reviews of the freelancer or bookkeeping service you want to hire. Otherwise, you will only have their claims of what they can do to go by. Checking online reviews will help you make a better-informed decision.
At What Stage Should I Hire a Bookkeeper for My Online Business?
Whether or not you need a bookkeeper depends mainly on the size of your business. After all, it wouldn’t make much sense to hire a bookkeeper if their fee is more than you make in a month. However, you should hire one once you begin to handle a reasonable number of transactions monthly and are ready to take on staff. Basically, if you’re just starting an online business, you can hold off on getting a bookkeeper till your business starts growing and you’re ready to expand.
What Credentials Does a Bookkeeper Need?
Bookkeepers aren’t legally required to have specific credentials, but if a bookkeeper is dedicated and thorough, there should certainly be reviews from their clients on the internet. Such reviews generally indicate the level of competence you can expect from a bookkeeper.
Recommendations
If you still have trouble deciding which virtual bookkeeper to go with, then you should check out Bench.
Bench
Starting at $159 per month, Bench is an excellent choice if you need to do some bookkeeping for your online business. They will assign you a team of professionals that will automatically import your transactions, categorize them and prepare monthly and annual reports.
Their app lets you view all your transactions and easily track your cash flow on your web browser or phone. You will also have access to payroll, invoicing, and tax filing services.
However, it can be a little hard on the wallet, especially if you own a startup. Many customers who wrote reviews felt that the quality of service more than made up for the pricing, though. Bench is undoubtedly a bookkeeping service to consider with a rating of 4.8 out of 5 on Capterra.com.
Pros
- A professional bookkeeping team
- Complete tax filing services
- Payroll, invoicing, and sales tax add-ons
Cons
- A bit pricey
Leave it to the Pros
While you can probably handle your own bookkeeping if you own an online startup, you should get a bookkeeper as the workload increases. That way, you free up more of your time and ensure that the work is done professionally.
Now you know what can bookkeepers do for your business, how to choose a virtual bookkeeper for your business, and how hiring one can improve your online business. All of which will help you make an informed bookkeeping choice best suited to your needs.
