Why You’ll Save More Money by Hiring a Bookkeeper
Written by Bindi Gethen
How many sleepless nights have you spent worrying about your financial records? How many family dinners did you miss because you were stuck reconciling bank statements? How many headaches have you had when trying to figure out taxes?
A bookkeeper is the superhero you didn’t know your business needed.
Now I see that sceptical look on your face. “What? A bookkeeper? But aren’t accountants better?” you might ask. While accountants are great for complex financial analyses and strategic advice, you’ll need a bookkeeper for the day-to-day management of your business transactions. Bookkeepers are also often more affordable than an accountant.
Is it cheaper to hire a bookkeeper or an accountant?
So why exactly is it cheaper to hire a bookkeeper than an accountant? It all boils down to the nature of the tasks they perform. Accountants typically deal with high-level financial analysis, tax planning, and business advice. These tasks typically require a high level of education and training, which is reflected in their fees.
On the other hand, a bookkeeper handles the day-to-day financial tasks like maintaining financial statements, processing payroll, and reconciling your books. These tasks, while crucial, are routine and don’t require the same level of specialised knowledge. Thus, their services come at a lower cost.
By hiring a bookkeeper for these everyday tasks, you’re effectively getting the best bang for your buck, leaving complex financial tasks for accountants only when necessary.
Pro tip
It's important to remember that, despite the lower cost, the contributions of bookkeepers should not be dismissed or undervalued. Their intimate familiarity with a company's daily financial ins and outs makes them trusted advisors who can provide insights into cash flow trends, customer payment habits, and opportunities to decrease costs.
Cost-saving advantages of virtual bookkeeping services
1. Time efficiency
Bookkeepers adept in using the latest accounting software can streamline daily operations, automating routine tasks such as entry of transactions, generation of invoices, and reconciliation of accounts.
This efficiency not only ensures the accuracy and speed of financial record-keeping but also frees up valuable time. Businesses can then use this saved time to focus on core operational aspects, fostering growth and innovation. In this sense, the cost-effectiveness of virtual bookkeeping extends beyond just monetary savings, contributing significantly to the overall operational efficiency and productivity of a business.
Understandably, as a business owner, you might still be on the fence about this. The thought of entrusting your company’s financial health to a bookkeeper, especially a virtual one, might seem risky. But let’s look at this through the lens of your daily operations.
Think about the value of your time. Time is something you can’t get back. You can’t generate more hours in a day. You’re hustling, you’re passionate, and you’ve got a business to grow. You don’t want to be poring over spreadsheets when you could be innovating and driving your business forward.
You’ll no longer need to crunch numbers or reconcile accounts. Instead, you could use that time to improve your products, services, or customer relationships – the very heart of your business.
Related articles:
Is Bookkeeping Same as Accounting?
How to Hire the Right Bookkeeper: 5 Important Questions to Ask
2. Cash flow management
It’s not uncommon for businesses, especially small ones, to struggle with cash flow. Unexpected expenses, late payments, or even a poor understanding of financial statements can lead to a cash crunch.
A virtual bookkeeper can help manage your cash flow more effectively. They can ensure that bills, salaries, and business loans are paid on time, chasing up outstanding invoices, and even forecasting future cash flow based on historical data.
Don’t just see a bookkeeper as an expense. They’re an investment – an investment in taking back your time and steering your business in the direction of your dreams.
3. Budgeting and planning
With the economy being a bit unpredictable, a bookkeeper can help you navigate the ups and downs. They’ll manage your invoices, follow up on payments, and keep your cash flow healthy, so you’re not caught out when it’s time to pay suppliers or staff superannuation.
Say you’re looking to expand your cafe to another location, a bookkeeper can help you figure out if it’s financially viable for your economic wellbeing. They’ll crunch the numbers. Look at your current shop’s performance. Forecast if a second spot by the beach is going to bring in the bucks or just more headaches.
Pro tip
When considering bookkeeping cost, keep in mind that you’ll need expert financial advice to make decisions based on solid data, not just gut feelings.
4. Avoid burnout
It’s easy to underestimate the toll that managing the financial aspects of your business can take on your mental and physical health. The constant worry about balancing the books, looking for tax compliance guidance, and planning for the future can lead to stress, anxiety, and eventually, burnout.
When you outsource to a cost-effective bookkeeper, they’ll handle the daily money tasks for a fraction of the cost of an accountant. In other words, they offer the assistance you need, at a price your business can afford, while still providing the financial insight and management necessary for growth.
5. Reduction in payroll overheads
When you engage with a traditional employee, you’re not just paying their salary. You’re also responsible for additional costs like health insurance, pension contributions, paid leave, and employment taxes. These overheads can drastically inflate the effective cost of an employee.
Let’s break this down to more concrete terms in terms of salary differences. Accountant rates in Australia, on average, might set you back around $70,000 to $100,000 a year. For virtual bookkeeping, it might cost you like $20,000 a year, or even less if you’re looking at a monthly service cost of about $680 to $3,000.
With a virtual bookkeeper as your budget-friendly alternative, you’re not just saving on their salary. You’re also cutting down on the hidden costs like benefits, office space, and that fancy coffee you know they’ll love. You’ll the most bang for your buck, and these savings can go straight back into growing your business (maybe getting that new piece of equipment you’ve been eyeing) or just giving yourself a little breathing room in the budget).
Clearly, a virtual bookkeeper doesn’t just make sense, they’ll make you dollars and cents.
Need more hours in your day? Let The Bookkeeping Studio handle your books.
From a purely financial perspective, opting for a virtual bookkeeper can be much more cost-effective for business owners.
The savings realised by going virtual can be redirected to other areas of the business, potentially leading to greater growth and efficiency. Moreover, the flexibility of virtual services allows businesses to scale their bookkeeping operations up or down as needed, without the commitment and fixed costs associated with employing a full-time accountant.
After all, running a successful business is not just about making money; it’s about using that money wisely. The Bookkeeping Studio team makes sure your every dollar counts. Start saving money in the long run. Buy yourself the time to focus on your business today.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
