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The Process of Beginning to Work with a Bookkeeper
I wrote this post because it often seems like once you hire a bookkeeper, you really don’t need to do anything in the relationship and you’re able to fully outsource it.
Oh, how I wish that were true.
You can hire a bookkeeper and they can be an immense help and make sure your bookkeeping is taken care of, but there are still responsibilities that you will have as the client.
And without you doing these things for them, they won’t be able to do their job (especially if you’re a Canadian because of sales tax the bookkeeping process is more in-depth, and with Canadian banks & their security settings, us bookkeepers aren’t blessed with automatic bank feeds that always stay connected). Thus, you need to be doing your part each month, to make the relationship with having a bookkeeper, one that works and one where you’re a great client for them to work with.
As for the process of coming on to work with a bookkeeper…
It will depend on:
- What month it is (how far into the year we are)
- Where you’re at for having your books done and taxes filed
- How up to date/far behind your bookkeeping (being 4 months behind & having previous tax years filed is different than being 2 years behind on bookkeeping and taxes 2 years behind on being filed), to where you would start in this process?
If a potential client comes to a bookkeeper and they’re 6 months behind on their books and they’ve filed last year’s taxes (ex: it’s July and they aren’t up to date), they would start with a “Catchup.”
If they were using a spreadsheet or something like the Tax & Profit Planner or didn’t have an accounting system in place, often a bookkeeper would first get them set up in their chosen accounting software Quickbooks, Xero, etc, and then they would “catch up” their books from January until now (July). This would include their actual books and any potential sales tax filings that they are behind on (ex: GST/HST or PST) getting those completed and filed.
Then once they are “caught up,” they would be on the monthly bookkeeping schedule, where each month their books are done and they receive their financial reports (not all bookkeepers offer this, it’s something to ask them about). They should also be filing your sales tax for you in real-time, going forward.
Not ready for a bookkeeper but want a great system in place to do DIY bookkeeping? Check out the Tax & Profit Planner.
Want more helpful tips for running the behind-the-scenes and financial side of your business? Join me on Instagram @intentionallywealthyco!
The differences between starting with a catchup, versus monthly bookkeeping:
This is an Example of how a Quality Bookkeeper Would Have Things Structured
Start with a “Catchup”
- Getting your books caught up for x number of months or years if behind
- If you’re not using a bookkeeping system, you’ll get set up in one
- This often will be a 4 figure investment as it’s multiple months/years happening at once (this is specific to Canadians as Canadian bookkeeping tends to be more manual for beginning a setup and catchup and there is a lot more involved due to sales tax and receipts, etc)
- Often payment plans are available
Monthly Bookkeeping Schedule
- Takes place after your books have been caught up to date
- If it’s the beginning of the year and you have last year’s bookkeeping taken off for filing taxes, you might just start from January on the monthly bookkeeping schedule
- Bookkeeping is typically completed by the 15th of the month (depending on when a client’s statements end and when the client gets their data to the bookkeeper) & reports are sent out (if they provide reports like P&L statements)
Expect to pay $350+/month for quality bookkeeping (depending on the size, complexity and ins and outs of your business). Refer to this blog post about what’s really involved in the bookkeeping process and perspectives to consider when it comes to how much you’re paying for a bookkeeper.
Wanting help with managing your cash flow as an entrepreneur? You can read more here about how I help my 1:1 financial coaching clients with this.
Want to really dive into improving how you manage your personal finances too? Check out the Intentionally Wealthy podcast!
