Individuals and families often thrive on a DIY mentality:
They do everything they can by themselves and won't pay for anything until you absolutely
have to. It's especially difficult to justify using a bookkeeper until one sees
the advantages. Today with user-friendly software such as QuickBooks and many
other pieces of software available, many feel they should be able to keep their
records on their own, even as they wrestle with finding the time and wonder if
they're doing things correctly.
While many find very basic bookkeeping pretty easy to do, the
job of keeping good financial records takes them away from having time to spent with the family.
Meanwhile, keeping ones financial records accurately seems to be getting more
complicated and incomplete records result in moneys lost. So what are the
options for an individual or family that wants to keep their financial records
straight but neither has the time, really doesn’t want to or can’t afford high
prices professional help?
Do I Need a Bookkeeper or an Accountant?
Actually it's a trick question. You may need both.
An accountant can analyze the big picture of your financial
situation and offer strategic advice. He or she produces key financial
documents, usually more than just profit-and-loss statements, and some, if
needed, will file your taxes for you (for a fee). After tax season is over, an
accountant can also act as an outsourced chief financial officer, advising an
individual or family on financial strategies
In contrast, a bookkeeper does the day-to-day hands-on
tasks: tracking income and expenses and can assure that every everything has
been entered -- and recorded correctly. If you have multiple income sources,
making sure that all your income is recorded so nothing slips through the
cracks. One of the biggest benefits to using a bookkeeper is that you usually
receive monthly reports, particularly Profit / Loss statements which shows you
just where you stand financially (plus other financial reports as needed). Also
a bookkeeper will make sure you have all your financial figures necessary at tax
time. They can also assist an individual or family with establishing a Budget which
is actually usable and workable them.
Many individuals and family’s see an accountant once a year
around tax time. If their records aren’t what they should be, not only does it
affect how an accountant sees the overall picture of your finances but he/she
often has to charge you more because of the additional time they must spend
putting things right.
One big question every individual or family will need to ask
themselves is this: “Is it going to pay to use a bookkeeper?” Let me give a
scenario for you to consider when asking yourself this question. For example,
let’s say an individual or family only spends 2 hours a week on their
bookkeeping (which isn’t probably even close). First you have to ask yourself
this, what is my hourly value? Let’s say for easy figuring it’s $20.00 an hour.
Two hours a week for four weeks equals 8 hours and $80.00 a month. A full day. Look
at it another way. What would you pay to have 8 more hours to spend with your
family? Finally and this is particularly true if you really don’t like the
bookkeeping aspect in the first place, how much stress and discomfort would be
taken off your back if you didn’t have to do your own bookkeeping?
Statistics show that individuals and families that use a
bookkeeper generally see the bottom line on their family’s Profit / Loss
Statement improve significantly once all those missed expenses and missed
income figures get added into the picture correctly.
Using a bookkeeper can sometimes mean an individual or
family needs to make some changes in how they operate. Usually this pertains to
the actual documentation and retention of income and expense records. Keeping
those records in a shoe box is just asking for trouble. Everything a bookkeeper
does and how accurate they are is totally dependent upon them having all the income
and expense records. A bookkeeper can offer some good advise where needed in
making corrective changes that can impact an individual’s or family’s bottom
line. Understand that a bookkeeper is not an accountant or financial advisor
and we recommend using one, particularly when major financial decisions need to
be made. A bookkeeper can provide some sound advise but they are not
accountants or financial advisors.
Is using a bookkeeper expensive? Not necessarily. Most individuals
or family’s don’t really need a ton of financial reports and aren’t dealing
with incomes in the millions of dollars a year. What they need is usually the
basic information required in a timely manner to make sound financial decisions
about their finances. You would be surprised how much information can be
gleaned from just a few basic financial reports. In most situation and
depending on what you want the bookkeeper to do, the cost of using a bookkeeper
is generally very affordable. Most individuals and families are generally
surprised just how affordable it can be.
