13 Jun 3 Things You Absolutely Need To Consider When Hiring A Bookkeeper
Have you found that as your business evolves your bookkeeping responsibilities have become more complicated and time-consuming? Perhaps what once was a tameable toddler-like time-gremlin has become a hulking gorilla looming over your shoulder at the end of every month? If so, you’re not alone by any means.
After the first initial years of setting up shop, many small business owners find that they’re spending a lot more time and focus on bookkeeping tasks than they’d like to when they would rather be putting that energy into product or service development and delivery. Three or four years after opening a business is a common time when small business owners wonder if outsourcing their bookkeeping would be more efficient and effective than continuing to wrestle the gorilla in-house.
Partnering with a virtual bookkeeper gives you the freedom to hand off your books and get strategic insights from a trusted expert to boot. You send the gorilla packing and say hello to more time to do what made you go into business in the first place, with a professional bookkeeper on your side to help you identify what’s working and what’s not.
Relying on a bookkeeper makes things easier and more accurate, too. Plus, working with a virtual bookkeeper is typically much less expensive than hiring an employee to tackle the tasks in-house.
So, how do you go about hiring the right bookkeeper, and what differentiates one bookkeeping agency from another?
Three of the most important benchmarks to keep at the forefront of your mind when choosing a bookkeeper are their business model, how they structure their pricing, and how they communicate. These may seem unrelated, but in reality they go hand-in-hand.
Business Model Processes Vs. CPA
CPA’s are trained to be excellent practitioners of tax, finance, and audit. But the credentials of a CPA don’t automatically equip someone to run an excellent customer service organization. What you need to get an understanding of is what processes are in place to make sure you get your financials in time, how they track to make sure that everything that needs to be done to keep you current is being done on a consistent basis, and what kind of controls they have for their employees.
Do they have a weekly, monthly, quarterly, and annual checklist in place to keep you running so you can eliminate variables and utterly reduce the potential for errors? What kind of failsafe system do they have in place in case whoever is managing your account leaves, gets sick, or is unable to fulfill their duties?
The CPA business model is generally geared towards exchanging time for dollars as opposed to being outcome-focused. Among the biggest drivers of an outcome-focused business model is process orientation and customer service prioritization, meaning that they are far more focused on helping you get what you need than on mere compliance, regardless of the time it takes.
Value-Based Pricing Vs. Hours-Based Pricing
Speaking of processes, customer service and the time it takes to deliver these consistently with excellence, it’s important to look at how a bookkeeper structures their billing. Bookkeepers typically structure pricing either on the estimated value they are providing you, or on the hours they clock working on your books.
Hours, or cost-based pricing, is calculated on a set rate per service, per amount of time spent. If it takes your bookkeeper 6 hours to reconcile your books one month rather than the more typical 4 or 5 hours, you’re billed for 6 hours. As such, your bill will fluctuate each month even though your bookkeeper is delivering the same services.
Value-based pricing gives a fixed price up-front calculated on the estimated value you’ll receive. For the same scenario of six hours to reconcile your books one month, you still pay the same price for that service, even though it required more time on the part of the bookkeeper that month. Your bill will remain the same each month based on the services you’ve signed up for.
The bottom line to consider with these two pricing models is that one of the biggest perks of turning over your books to an outsourced bookkeeper is that you no longer have to stress over how many hours it might take to reconcile your books. That stress remains if you’re being billed for each one of those hours for someone else to do it.
When you pay by the hour, your bookkeeper is incentivised to take longer. When you pay on a fixed fee basis, your bookkeeper is incentivized to get the work done timely and efficiently, and you are both yoked to the same outcome. Plus, you won’t feel the urge to cringe when you open your bill each month.
If your bookkeeping service has a fixed-rate, value-based pricing model, you have no need to be concerned about how frequently you contact them to ask questions about your books. You are not being billed you each time you call, email, text, or drop by, or by how long those conversations last.
Your bookkeeping services will still be given the same time and attention each month no matter how often you need to reach out. Unlimited, open communication is inherent in the value of the financial services you’re paying for, and is not considered a cherry on top that costs extra.
Verify when you get a price estimate for how much outsourced bookkeeping services would cost for your business that this is indeed the price you’ll see on your bill each month. No surprises, no hidden fees or extra charges because you contacted your account manager 4 times instead of 3, or because you talked for 20 minutes instead of 10.
Without that hulking stressful gorilla of bookkeeping looming over your shoulder, you’ll likely find yourself able to focus with more clarity on the tangible tasks of growing your business. New questions may emerge that you now have more time and energy to address, such as where you might best invest resources for the next quarter, or how you might streamline expenses. You may also find that passing off assistant-level tasks such as scheduling or gathering data would help you be even more productive.
A bookkeeping service that offers scalable offers such as certified financial advisory for the big picture or assistant services for the everyday tasks side of the business would help you and your staff be even more effective and efficient. Just be sure that any scalable services, such as CFO Advisory and Assistant Services, that a bookkeeper offers are also on a value-based pricing structure as well..
Quarterly consultations to talk about strategic decisions, company vision, and your goals and concerns for the future can help you stay on the fast track to success. Plus, assistant services such as inbox optimization, calendar management, and handling of other time-consuming tasks frees up even more of your time to focus on doing what you do best—running your business.
If you’d like to better understand just how beneficial outsourcing your bookkeeping might be and in how it can accelerate the growth of your business, click the image below to schedule a call with us. We’d love to talk with you about how we can help you achieve your vision for your business. Learn more about us at tworoadsco.com, call us at (865) 212-0063, or schedule a call online.