Often times, fear of the unknown is what keeps us from taking the next step in business. Whether that’s figuring out a new sales platform, a new social media program, or hiring outside help like a bookkeeper, it can be a real hindrance to getting ahead.
I sometimes come across potential clients that are unsure about hiring a bookkeeper because they’re unsure about what to expect and what a bookkeeper needs from them to be able to do a good job. In this post I want to highlight exactly what a bookkeeper needs from a client and how you can help in the process by keeping files nice and organized.
This may be the scariest thing for a small business. But a bookkeeper will need to know all about your business spending habits – where your money goes and who it comes in from. That’s why trust is so important when hiring a bookkeeper. Look for someone reputable and who can easily provide references.
You’ll need to furnish all your bank statements, credit card statements, PayPal transactions, square and/or Etsy transactions. Any type of transaction you make and where that your money flows, your bookkeeper needs to see it and have a record of it.
Being able to provide monthly statements from each bank, including Etsy or PayPal, is one of the easiest ways of doing this. Your bookkeeper won’t need to have access to your accounts, but if you have a really good relationship, you can give account access to them as it will make things easier in the long run.
Sharing these statements can easily be done through Dropbox or another file sharing system. Make sure to label each file clearly and that each statement is for the previous month. You can also use a service such as Receipt Bank, which collects and records all of your expenses, but know your bookkeeper will also need to see any additional transactions that are not captured via this service.
Reminder: Canadians need ALL receipts attached to their bookkeeping software. So make sure you keep a copy of your original receipt and create a digital backup. Your credit card statements are not considered receipts. If you’re in the U.S., you’re in luck, credit card statements are just fine.
It’s best to send your files and transactions on a monthly basis so your bookkeeper can reconcile your accounts at the end of each month. So set these expectations from the start. If you want monthly reports on top of your reconciliation, make sure your bookkeeper knows this, and you’ve discussed a plan of attack and know which files to provide and when.
If you need to report your Quarterly Sales tax, make sure you know who is responsible for filing these. Is it you or your bookkeeper? And what files will your bookkeeper need on top of your monthly transactions to be able to do so? It is best to provide your information each month, instead of every three months. Same goes for your yearly income taxes. Make sure you know who is responsible for filing and that you are providing the correct files at the right time.
Know the Lingo
Not sure what “accounts receivable” is? Many bookkeepers offer group training or one-on-one tutoring to help get you up to speed and on the same page. It’s always good to know the bookkeeping system that you are using so when your bookkeeper talks to you about your accounts receivable, you’ll know they’re talking about your sales. This helps keep you and your bookkeeper organized.
You want to help make their job easier and be able to provide the correct documents as it’s a waste of your time and money if your bookkeeper is searching for documents instead of processing the information.