Why You Shouldn't Hire a Bookkeeper For Your Business Right Away


As your business grows many people will tell you that outsourcing your financial management to a bookkeeper is a great choice to save yourself time and headache with managing your money. I would counter that this may not be the best choice for you, your business or your money.

Contrary to popular belief, hiring someone to manage your money may not serve your best interest when it comes to growing, learning or removing any of your money blocks. If you are already comfortable with managing your money, it helps to free your time to grow your business in ways that you might not have been able to before. It can provide you with information and clarity about business decisions.

But and this is a BIG but:

  • If you don't already have systems in place
  • If you don’t have a money mindset shift completed
  • If you don’t have a good handle over your personal and/or business finances

...Then hiring a bookkeeper could mask and disable the growth of your money management abilities and money mindset for your life and your business.

It’s important to note - I am a bookkeeper! It's what I do for my business. It's part of my love and passion for helping people set up their businesses and financial management systems and then help them learn how to handle their money. You might be wondering why am I saying that most people really don't need my services?

 

Why You Should Know Your Money and Your Business Thoroughly


Being educated about your finances and how you can track your accounts is key!

  • If you do not know how to handle your money at a basic level, at the very least know what your inflows and outflows are. Knowing your cash flow on an intimate level is important because if you don’t understand the information coming from your money tracking software or accounting program, then hiring a bookkeeper will disable you from ever having to learn this.


  • To be an effective owner, leader, and trailblazer it is imperative that you understand the basics of your business finances. If you always rely on someone else's information or interpretation of your information then not only can you be held hostage by that person and their potentially skewed views, but you never learn to trust your own judgment based on the numbers that you know how to interpret and implement. If you find yourself relying on others for clarification it opens the door for dishonesty and manipulation by your bookkeeper or account.
     
  • How do you know that the person you are hiring to do your bookkeeping is qualified, honest, and doing the best work for you if you’ve not learned how to do the basics yourself? If you know the basics you can pop in and review the work that is done and know where to look for errors. You will also be able to make an informed decision about whether to hire a person to help you with your business when the time is right.
     

Most professionals are hard-working, ethical and have their client’s best interests at heart. That being said, it’s important to protect yourself and your business to know if and when this is not the case. Knowledge is power.

Canada doesn’t currently have statistics on bookkeeper fraud, but a study done in Australia in 2011 determined the most common ways that fraud occurred. In the majority of cases, the fraudulent bookkeeper simply took money from the business and transferred it electronically to their bank account.

Most common techniques used to steal money:

  • Payroll - invoicing for overtime that never occurred or creating employee invoices with false expense all done by direct deposit
  • Double Billing - paying Company ABC’s invoice for $500 and then paying themselves under Company ABC
  • Writing cheques to “cash”
  • check
    Simple bank account transfers. This becomes even easier with great technology where software like Quickbooks is linked electronically to your business’s bank account

I will say it again, knowing your business and its cash flow is imperative. Once you do, then by all means, hire a bookkeeper to save you time so you can focus on other important tasks. Be sure to check the “books” on a regular basis so you can spot any sign of discrepancy early.

Build a relationship with a bookkeeper first! I can teach you how and we can grow together until you are ready to fully hand off this task. Check out “The Easy Package” for your online business.

I’m in the process of creating the “Guide for Choosing Your First Accountant or Bookkeeper” that describes the difference between the two, how to interview for this important role in your business, and which questions to ask. So stay tuned for this release as I know you will find it a valuable resource for your business. You can opt in to my email list here to be notified.