Why You Need a Bookkeeper for Your Service-Based Business
Whether it’s in the DMs or on a discovery call, there’s a question I get all the time: when do I need to hire a bookkeeper?
And you’ve probably asked the same question, too, at one point or another – which is why you’re here (I see you). But, before you can get into the “when” you need to address something else: the why.
Hiring a bookkeeper doesn’t sound so attractive when the first thing your brain defaults to is “organization.” Which, in all fairness, is a huge perk of having a bookkeeper, but only scratches the surface.
The “why” behind needing a bookkeeper depends on your business – your structure (LLC vs. S-corp), your offer suite, the contractors you have (or don’t have), and how you want to scale…
Let’s talk about it:
Why You Need a Bookkeeper (And What a Bookkeeper Actually Does)
A bookkeeper is a person whose job it is to keep records of the financial affairs of a business. We track your business expenses, your profit and loss, your transactions, and more (all of which are pulled together and presented in an easy to understand way in your monthly reports).
What does this do? It monitors where your money is coming and going from.
You’re able to monitor your cash flow (the total amount of money into and out of your business) and confidently make investment and business decisions.
Here are a few perfect examples of why you might need a bookkeeper:
Thinking about hiring a marketing manager on retainer? You’ll have the data on hand to know if you can afford it (and afford it comfortably) or if you need one more client, student, or sales to make it work.
Low on cashflow? Your bookkeeper’s reports can give you insights into your most profitable offer – and most popular.
Have an income goal to hit? A bookkeeper will help you track your goals, give you insight into how far off you are each month – and even compare your income year over year.
It’s not just planning, either, it’s having year-over-year insights into profit trends. You’ll know the seasons when your clients tend to book – and when they don’t. It’s getting recommendations on how much profit to take home, how much to set aside for tax season (and pay in quarterly taxes), and tracking your business expenses for more accurate deductions.
Bookkeeping exists for compliance, but it also exists for growth.
Are You Ready to Outsource Your Bookkeeping?
Now that you know the why – let’s answer the first question: when is the right time to hire a bookkeeper?
First, determine what type of bookkeeping support you’re looking for. For example, you can invest in one-time bookkeeping set-ups and clean-ups. Or you can invest in monthly bookkeeping services.
And while it ultimately depends on YOUR business, there are a few common signs that you’re ready:
You’re making consistent revenue.
You can’t keep up with categorizing income and expenses every month.
You have more questions than answers when you try to do your own bookkeeping.
You can’t tell if you’re ready to make a 4- or 5-figure investment solely on the numbers in your bank account.
You’re earning $100K+ per year (or are on track to).
You’re an S-corp.
Also, sidenote: not experiencing these “signs” or hitting these specific milestones does not mean you don’t need bookkeeping – you do.
You may not be ready to outsource to a bookkeeper (and you might prefer the CEO Sidekick, an all-in-one system for tracking your income, expenses, goals, & tax savings).
If You Did Want to Hire a Bookkeeper, This Would Be Your Next Step:
Nail down the reason why you’re considering hiring a bookkeeper in the first place. What drove you to this point? Was it a lack of data? Have you skipped your weekly bookkeeping date and realized you never want to have one again?
It could be a goal you have – one you think a bookkeeper could support. For example, here’s what some of our clients have experienced and achieved:
“This is the first time I’ve felt completely comfortable with the accuracy of my books.”
“There’s a noticeable shift: less on my shoulders, and way more peace around the decisions I’m making. It’s changed the entire trajectory of my business”
“I’ve been able to actually start looking at myself as a CEO. I feel like I’m in a place where I can actually think more holistically and strategically about my money, about the way I spend it, and about what I do with it”
Then find someone who gets your business and your industry – or who is willing to deep-dive into your business to see how they can best support YOU. Get on a call, ask questions, review client testimonials.
You need a bookkeeper you can stick with – one who’s ready to support you long-term.
Ready to hire a bookkeeper? Take the first step and learn more about our signature monthly bookkeeping here and ditch the guesswork.
