When Should Your Accounting Firm Hire a Bookkeeper?

As an accounting firm, your expertise lies in high-level financial analysis, tax planning, and advisory services – not tedious bookkeeping tasks. Spending countless hours on data entry, bank reconciliations, and accounts receivable/payable prevents you from focusing on your core strengths. Hiring a dedicated bookkeeper allows you to offload these time-consuming administrative duties, freeing your team to concentrate on higher-value work that drives growth and profitability.

The Benefits of Hiring a Bookkeeper

Hiring a bookkeeper will offload lots of work on your team’s shoulders so that they can focus on the core aspects of your business. Some of the most important work is:

• Better Data Accuracy and Reliability: Bookkeepers are solely dedicated to accurately recording financial transactions and maintaining flawless books. With their intense focus on this task, bookkeepers are far less likely to make coding errors, miss transactions, or fail to obtain required documentation. This ensures the financial data your accounting team relies on for analysis, reporting, and tax preparation is precise and up-to-date at all times.
• Significant Time Savings for Your Accountants: Bookkeeping is enormously time-consuming. Manually categorizing and entering transactions, obtaining documentation, and reconciling accounts – these tedious tasks consume a tremendous number of billable hours for accountants. By hiring a bookkeeper, you reclaim all those hours to be reinvested into higher-value accounting, advisory, and client services that actually drive revenue and profits.
• Reduced Burnout, Increased Retention: For trained accountants, bookkeeping duties are often mentally draining. The monotonous nature of the work can easily lead to burnout and low morale over time. Removing this burdensome, recurring workload allows your skilled accounting staff to focus on more engaging and challenging aspects of their roles. This helps boost job satisfaction, reduce turnover rates, and retain top talent.

Signs It’s Time to Hire a Bookkeeper

You might be confused about whether your firm needs a bookkeeper. Your profit will likely scale down because you’re adding in an extra member. But here’s when you should definitely do it:

1. Your Firm is Growing Rapidly
   If your accounting practice is experiencing fast growth and onboarding many new clients, the bookkeeping workload will quickly become unmanageable. Unless you have a dedicated resource focused exclusively on bookkeeping, data entry will lag, documentation will be incomplete, and mistakes will increase as your accountants are overwhelmed. Bringing on a full-time bookkeeper allows your back office to scale seamlessly with your firm’s expansion.
2. You’re Constantly Behind on Bookkeeping
   Are you perpetually behind on reconciling accounts, categorizing transactions, and obtaining documentation no matter how many overtime hours your team puts in? This is a surefire indicator that your existing staff cannot keep up with the bookkeeping demands. Falling behind makes your books inaccurate and incomplete when your accountants need that data for higher-level work.
3. You’re Spending Too Much Time on Data Entry
   As highly trained accounting professionals, your expertise and billable hours are too valuable to spend on basic bookkeeping data entry. Suppose your accountants are devoting a substantial portion of their days to clerical tasks like coding expenses and manually entering transactions. In that case, it’s time to offload that work to a dedicated bookkeeper.
4. You Want to Reduce Errors
   Bookkeeping errors are incredibly common when overworked accountants rush through recording transactions and reconciliations. Missed entries, incorrect categorizations, and lapses in documentation can severely undermine the integrity of your financial data. A bookkeeper focused solely on this work will operate with far greater accuracy.
5. You Need Better Month-End Close
   If you struggle to close your monthly books efficiently due to unreconciled accounts, missing documentation, and uncategorized transactions, it’s a huge red flag that you need bookkeeping support. Having a bookkeeper to ensure daily transactions are coded properly and reconciliations are completed allows for a smoother month-end close.
6. Your Accountants Are Burned Out
   When your highly-skilled accounting team is overwhelmed with low-level bookkeeping duties on top of their other responsibilities, it leads to burnout, low morale, and turnover. Excessive tedious tasks prevent them from working on the engaging, challenging work that inspired them to become accountants. Offloading bookkeeping reduces stress and re-energizes your team.
7. You Want To Provide Better Client Service
   Incomplete or inaccurate bookkeeping makes it difficult for your accountants to deliver the high-quality financial analysis and advisory services your clients expect. With a dedicated bookkeeper maintaining reliable books in real time, your team will have the data they need to provide timely insights and truly become a trusted advisor.

Finding the Right Bookkeeper

What to Look For
When hiring a bookkeeper, relevant experience and a proven track record are crucial. Look for candidates with several years of bookkeeping experience, preferably in accounting firms or related industries. Request references and examples of their work. Also consider their technical skills – expertise with your accounting software and confidence with functions like bank reconciliations is ideal. For specialized firms, a bookkeeper familiar with the nuances of your niche is highly valuable.

In-House vs. Contractor
There are pros and cons to hiring an in-house bookkeeper versus using an external contractor or bookkeeping service. An in-house employee is dedicated fully to your firm, learns your processes inside out, and operates under your direct supervision. However, you’ll incur costs for payroll taxes, benefits, training, and office space. An external contractor is often more cost-effective but may split time across multiple clients. Evaluate your firm’s needs, budget, and growth plans to decide which path is best.

Onboarding and Training
Regardless of which route you choose, properly integrating your new bookkeeper is essential. Dedicate time to clearly document your firm’s processes, naming conventions, use of accounting software, and coding procedures. Have them initially work in parallel with your accountants to identify gaps in their skills or understanding. Make sure they understand deliverable deadlines and how to properly document their work. Setting clear expectations upfront prevents costly errors down the line. Be patient as it may take a few months before they are fully ramped up.

Conclusion

For accounting firms, bringing in a dedicated bookkeeper is an investment that quickly pays off through increased efficiency, accuracy, and productivity. By offloading the tedious transaction recording and reconciliation tasks to a specialized professional, your highly skilled accountants can focus their time and energy on the high-level analysis, advisory services, and tax planning work that drives profitability and growth. Don’t let bookkeeping purgatory hold your firm back – hire a bookkeeper to take your practice to new heights.

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