As the owner of a small growing business, you’ve probably got to the point where you can no longer handle all your accounting tasks alone. If you haven’t got there already, you will. 

In our experience working with small business owners, when you get to this point, your first thought will be to look for a bookkeeper to hire. 

As a firm of accountants, you’d imagine we’d be telling you to go for it! And yes, of course, when you’re time poor, getting some support will lighten the load. 

We want our clients to get the help they need with their finances, so they can get back to doing what they love. But the reality is, for many businesses, hiring a bookkeeper in-house may not be the most cost effective move. 

We want to make sure you’re not just getting any support, you’re getting the right kind of support, so that you don’t bring yourself further stress. 

First of all, you need to assess whether you’re really ready to hire in-house. 

Reasons you may not be ready to hire in-house

You’re not big enough for a full time employee, and it’ll be a financial risk 

There will come a point where hiring in-house staff is necessary. You will get there. That being said, hiring staff is expensive – and it may not be the most financially smart option for you right now. 

When you hire an employee, you will need to factor in the associated costs:

  • Their wages – for full time or part time work
  • Their benefits and entitlements – Holiday pay, sick pay, maternity/paternity pay
  • Legal responsibilities – PAYE, Auto-enrolment
  • The cost of training – Any courses they may need to take or learning to complete
  • Overheads and equipment – Office space, computer, the cost of accounting software for your bookkeeper to use.

That’s not to mention the time and cost of the hiring process. In order to find the right person, you will need to sacrifice some of your own time for CV reviews, interviews, and getting someone up to speed with how the business works when they start. 

We often see clients jumping the gun before they have a hiring process designed to attract and retain the right kind of people, which brings us to the second reason you may not be ready. 

Your hiring process isn’t where it should be, meaning you may hire the wrong person

What you really don’t want, is to hire the wrong person and find your books in a mess down the line. Your hiring process is about more than simply finding someone with the desired experience. You’ll want to:

  • Hire by your company values and culture – not just by experience. The right person in skills can still be the wrong person in attitude and personality.
  • Test their skill – give them a complete tester project or come in for part of a day to see how well they can do the things you require of them, and what their approach to the work is. You’ll want to look at more than just their competence in accounting, but also their approach to project management and organisation. 
  • Decide who is going to be directing them – How involved are you going to be in the new person’s day to day? Who will be in charge of employee reviews, training and leadership?
  • Assess what you will need to train them in – It’s great to get someone in with the skillset to fill the gap in bookkeeping, but what else will they need to know about your company and it’s internal processes, your clients and customers to do the job?

Think also about the cost to you and your business of hiring the wrong person. A thorough strategic hiring process is your protection from unnecessary stress in the future. 

The alternative option: Outsourcing 

What if you could get full time work for less than all the accumulated costs of a part time in-house employee. This is the argument for outsourcing. 

If you’ve got this far in the blog and you’re thinking ‘I am definitely not ready’ then don’t despair! It doesn’t mean you’re going to be stuck where you are, desperately trying to find time to get everything done. It just means you need to consider a different approach. 

The benefits of outsourcing:

  • You may have the expertise of a whole firm – Most often when you outsource your bookkeeping, you’re doing so to a firm of certified bookkeepers and accountants. In this case, you won’t need to think about providing training. With an expert at hand, it also gives you more freedom to pull yourself out of the finance function, leaving the books in trusted hands. 
  • You won’t have to budget for all the employee costs – You’ll likely be paying a monthly fee, but it won’t directly be someone’s salary, and therefore you won’t need to be paying for employee benefits. 
  • You can get work done when you need it – When you outsource work to a bookkeeper, you have more freedom and flexibility on the amount of time you invest in. The cost will be based on what you need per month, and it’s likely there’ll be add-on options if you need extra support. 
  • They’ll come equipped with the best tech – This one is key! There are some brilliant cloud accounting software options out there now. We love Xero for many reasons – the most fundamental of which is that it allows you to see your updated numbers in real time, allowing you to make more informed faster decisions. An outsourced bookkeeper will already be equipped with the kind of tech that speeds up the ‘doing the books’ part, and frees up more time for them to give you more value.
  • You have an external advisor – You may find that an experienced outsourced bookkeeper can bring more to the table than bookkeeping skills. Your bookkeeper can give you strategic advice on how to run and grow the business, based on what the numbers are telling them. 

When hiring a bookkeeper becomes a good financial decision

There may come a point where you have the budget for an experienced bookkeeper, the hiring process to attract them, and the infrastructure to support them. Great!

If you’re not there, outsource the bookkeeping to an experienced team, so that you can spend your time building your business up to the point where you’re ready to take on staff. 

Want to know exactly what you can outsource? Take a look at how we do things here.