Many business owners handle their own bookkeeping when they first start.
For a new or relatively simple business, that may work perfectly well. But as the company grows, bookkeeping tends to become more time-consuming and more complicated.
There isn't a specific revenue level or number of employees that automatically means you need a bookkeeper.
Instead, there are usually signs that bookkeeping is requiring more attention than you can reasonably give it.
1. Your Books Are Consistently Falling Behind
If bookkeeping keeps getting pushed to next week or next month, that's one of the clearest signs that you may need help.
One missed month can quickly become three or six months.
The further behind you get, the harder the work can become because older transactions may be more difficult to identify and supporting documentation can be harder to locate.
2. You Don't Trust Your Financial Reports
Your financial statements should help you understand your business.
If you look at your Profit and Loss Statement and immediately wonder whether the numbers are correct, something needs attention.
Unreconciled accounts, missing transactions, or inconsistent categorization can make otherwise useful reports difficult to rely on.
3. Bookkeeping Is Taking Too Much of Your Time
Business owners already wear a lot of hats.
There eventually comes a point where spending several hours reconciling accounts or categorizing transactions may not be the best use of your time.
If bookkeeping regularly follows you into evenings or weekends, outsourcing it may allow you to spend more time on customers, employees, sales, or other areas where you have a greater impact.
4. Your Business Has Become More Complex
Growth often creates additional bookkeeping work.
You may have more customers, additional vendors, multiple business credit cards, loans, new bank accounts, higher transaction volume, or more complicated billing.
A process that worked when the business was smaller may no longer be enough.
5. Your Accounts Aren't Being Reconciled Regularly
Bank and credit card reconciliations are an important part of maintaining accurate books.
If several months go by without reconciling accounts, errors can remain unnoticed and become more difficult to investigate later.
Consistent reconciliation helps keep the accounting records tied back to actual financial activity.
6. Your CPA Has to Clean Up the Books Every Year
Tax season shouldn't begin with a large bookkeeping project.
If your CPA regularly needs to ask extensive questions, make numerous corrections, or spend time cleaning up the books before preparing your return, more consistent bookkeeping throughout the year may help.
A bookkeeper can maintain the records month by month so your CPA receives cleaner information at year-end.
7. You're Making Decisions Without Reliable Financial Information
Should you hire another employee?
Can the business afford new equipment?
Are expenses growing faster than revenue?
Is the company becoming more profitable?
Those questions are difficult to answer when the bookkeeping is several months behind.
As a business grows, accurate financial information becomes increasingly important.
You Don't Have to Wait Until Something Goes Wrong
Many owners wait until their books have become a problem before asking for help.
You don't have to.
Establishing a consistent bookkeeping process while the business is growing can be much easier than correcting months or years of incomplete records later.
The right time to hire a bookkeeper may simply be when keeping the books accurate is no longer something you want—or have time—to manage yourself.