How to Pick the Best Bookkeeping Package for Your Small Business
Your bookkeeper plays a crucial role in your small business by tracking and recording financial transactions, ensuring your books are in order. However, it’s important to remember that your bookkeeper is not a financial planner. They focus on what has already happened financially in your business, not on future financial planning like determining the right time to hire new staff or increasing your own salary.
To build a successful financial team, you need various experts, each excelling in their specific role. It’s vital to ensure you’re getting the most out of your bookkeeper by understanding their responsibilities and leveraging their skills effectively. Learn more about the various roles of a financial team for a small business owner here.
Understand What’s Included in Your Agreement
Monthly Financial Statements
Ensure your bookkeeper provides comprehensive monthly financial statements. These documents are essential for understanding your small business’s financial health and making informed budgeting decisions.
Reconciled Books
A reconciled book means your financial records match your bank statements. This process helps catch any discrepancies or errors, ensuring accuracy. Regularly check that your books are reconciled to maintain financial integrity and improve cash flow management.
Communication for Additional Information
Your bookkeeper should have a straightforward method to request additional information from you. An easy-to-use platform or system for communication can streamline this process and prevent misunderstandings.
QuickBooks Membership
If your bookkeeper is a QuickBooks Online (QBO) expert, they might receive a discount on the software, which they can pass on to you. Ensure you understand who covers the QuickBooks cost and how it affects your expenses.
Financial Planning Support
Be cautious when expecting financial planning support from your bookkeeper. They may not have the expertise to provide strategic financial advice, such as the best time to hire an employee. For this, consider consulting a Certified Financial Planner (CFP).
Bookkeeper Credentials
Verify your bookkeeper’s credentials to ensure they have the necessary expertise. Credentials indicate their level of knowledge and commitment to maintaining professional standards.
Support When You Need Help
As your business grows, your need for financial support will increase. Understand the level of support your bookkeeper offers, whether it’s help with understanding your books or adjusting your chart of accounts.
Price Considerations
A lower price for bookkeeping services isn’t always better. Understand what services are included in your bookkeeper’s fee and be aware of any essential services that might be missing from a lower-priced package.
The Bare Bones of What You Need
At a minimum, your bookkeeper should provide:
- Monthly Financial Statements & Year-End Reports: These are crucial for tax preparation and overall financial oversight.
- Reconciled Books: Ensuring your financial records match your bank statements is essential for accuracy and financial health.
What You Need to Do with This Information
Understand Each Item on Your Reports
The financial reports your bookkeeper provides are for your benefit. Ensure you understand every category (chart of accounts) and figure in these reports. If you’re unsure about any part, ask your bookkeeper for clarification.
Use the Information Strategically
Using the information in your financial reports is key to making informed business decisions. If you neglect this data, you miss out on a crucial opportunity to strategically grow your business through effective budgeting and cash flow management.
By effectively managing your bookkeeper and understanding their role in your small business, you can ensure your financial records are accurate and leverage this information to make strategic decisions for growth. Remember, your bookkeeper works for you, and maximizing their potential can significantly benefit your business.