When Is The Right Time To Hire A Bookkeeper?
/When you first start freelancing, you are wearing all of the hats. You are doing the sales, the marketing, the operations, customer service, servicing the client and everything in between. As your business continues to grow you will want to outsource some of these tasks and hone in on your zone of genius.
One of those tasks is likely bookkeeping. Unless you started a bookkeeping business, managing the books probably isn’t in your zone of genius. And there are plenty of experts who do consider bookkeeping to be their zone of genius and will add immense value to your company.
With that said, one of the biggest mistakes I see freelancers make is prematurely hiring a bookkeeper. You need to spend time doing your own books before hiring it out. Why? One, learning how to manage your business finances is a skill every entrepreneur needs to learn if they wish to be successful. Two, it will make the hiring and training process of your future bookkeeper that much easier because you’ll know what you are talking about.
So when is the right time to hire a bookkeeper?
Every business is different and every freelancer’s journey is unique. Therefore, it’s hard to pinpoint a specific time frame of when you should hire a bookkeeper. It’s also hard to use revenue as the determining factor because some freelancers may reach this threshold before they are ready for a bookkeeper. For example, one freelancer may be earning $100,000 per year but only have two clients. Whereas another freelancer may have twenty clients and earning the same amount. My guess would be that the second freelancer would be ready to hire a bookkeeper, and the first one should wait, even though they each earn the same amount of money.
My General Rule Of Thumb When Hiring A Bookkeeper For The First Time
My general rule of thumb is you should manage your own books until you earn at least $100,000 in annual revenue.
As you can see from the example above, however, revenue is not the only consideration. Once you have reviewed your revenue, ask yourself the following questions to see if you are ready to hire a bookkeeper.
Questions To Ask Yourself To See If It Is The Right Time To Hire A Bookkeeper
Is managing my books getting in the way of growing my business? If the answer is yes, then you may want to consider hiring a bookkeeper.
Do I want to hire a bookkeeper to avoid looking at my finances? If the answer is yes, then you should definitely NOT hire a bookkeeper.
Have I managed my books for at least one year? If the answer is no, then you should definitely NOT hire a bookkeeper.
Can I afford to pay someone at least $500 per month to manage my books? If yes, then you are in a financial position to consider hiring a bookkeeper.
Am I clear on how a bookkeeper will improve my business? If no, then keep doing your own books until you better understand the value of a bookkeeper. To learn more about the role of a bookkeeper, click here to watch my 60-second video.
Once you have asked yourself these questions and answered them honestly, then you should know whether it is the right time for you to hire a bookkeeper.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Money & Mimosas is now enjoyed by tens of thousands of readers in over forty countries with the same dream of achieving financial freedom without living frugally.
