When To Hire a Bookkeeper for Your Growing Business + Best Options

Hiring a bookkeeper for a growing business is essential for maintaining financial health and organization as your company expands. It becomes necessary when financial tasks become too time-consuming or complex, accuracy becomes a concern, preparation for growth is needed, and tax compliance becomes challenging.

Other considerations include when financial insights are required for decision-making, cash flow management is crucial, and external stakeholders require transparent financial records. The other alternative is to not hire a bookkeeper and handle all of the accounting tasks yourself.

By recognizing signs and considerations, you can make informed decisions about when to hire a bookkeeper to support your company’s financial management needs.

Scenarios	Solutions
You’re Launching a Business	When starting your business, it’s crucial to set up your financial systems correctly from the beginning. An experienced in-house bookkeeper can help you establish these systems, organize your finances, and ensure compliance with accounting standards and regulations. If you don’t think you’ll need a permanent bookkeeper, an outside bookkeeper could set up your systems and then turn the bookkeeping over to you.
You’re Experiencing Time Constraints	If you find yourself spending too much time on bookkeeping tasks instead of focusing on core business activities, it might be time to hire an office manager who is trained in QuickBooks. Outsourcing these tasks or transferring them to an employee can free up your time to concentrate on growing your business.
Your Business Is More Complex	As your business grows, your financial transactions and reporting requirements may become more complex. A full-charge bookkeeper can handle the increased volume of transactions, manage payroll, reconcile accounts, and generate financial reports.
You’re Seeking Help With Tax Compliance	Tax laws and regulations can be complex and ever-changing. A bookkeeper will effectively communicate and provide information to the tax professional to assist with tax compliance.
You’re Needing Assistance With Financial Analysis	If you need help to understand your company’s financial performance and make informed decisions based on financial data, a managerial accountant can provide valuable insights through financial analysis and reporting.
You’re Looking To Save Money	While hiring an outside bookkeeper either locally or virtually involves an additional expense, it can ultimately save you money by preventing costly mistakes, identifying areas for cost savings, and improving overall financial efficiency. Experienced bookkeepers can work quickly and paying them for four hours might save you eight hours of work.
Your Business Is Growing	If you anticipate rapid growth or fluctuations in your business, hiring a full-charge bookkeeper can provide scalability to accommodate changes in your financial needs without overburdening your existing staff.
You Have Creditors That Expect Quality Financials	A qualified controller will be able to provide you with complex financial reports and also help you analyze the data, identify trends, analyze key performance indicators (KPIs), and even comply with generally accepted accounting principles (GAAP) if required by creditors.

The decision to hire a bookkeeper depends on your company’s specific needs, resources, and growth trajectory. If you find yourself struggling with managing finances, making errors in bookkeeping, or lacking the time to focus on core business activities, it’s probably a good time to hire a bookkeeper.

Best Options: Types of Bookkeepers

1. Outside Bookkeeping Service

If your business isn’t large enough to require an in-house bookkeeper, outsourcing to a bookkeeping service may be a more affordable option so that you don’t have to take on employment costs like benefits and insurance. There are two different types of outside bookkeeping services: local and online. Freelancer bookkeeping rates will vary based on location, education, and certifications of the bookkeeper you choose.

While each has its pros and cons, here are some key differences:

	Local Bookkeeping Service	Online Bookkeeping Service
Location	Works in proximity to your business Lets you meet face-to-face and have a more personal interaction	Works remotely, usually communicating via email, phone, or videoconferencing Can be located anywhere in the world
Convenience	Might offer the convenience of being nearby for in-person meetings or to drop off/pick up documents	Offers flexibility in terms of communication and document sharing Is especially beneficial if you have a distributed team or prefer to work with professionals who may not be located in your area. Lets you access your financial records and communicate with them from anywhere with an internet connection
Cost	May charge higher rates due to overhead costs such as office space and commuting expenses	Is often more cost-effective as it has lower overhead costs and may offer competitive rates
Availability	Might have limited availability (regular business hours) Might be unavailable during emergencies or outside of agreed-upon times	Can be available outside regular business hours and may offer services on weekends or holidays, depending on the arrangement
Expertise	Might have a better understanding of local regulations and business practices	Can have expertise in a particular industry or niche Lets you leverage its specialized knowledge to address specific accounting needs or industry requirements May also have experience working with clients from different regions or countries
Security	May allow you more control over the security of your financial data as it’s handled locally	Generally employs advanced security measures to protect your data during transmission and storage
Scalability	Might have limitations in terms of scalability, especially if it has a small team or operates as a sole proprietor	Can often scale their services more easily to accommodate your growing business needs Lets you adjust the level of service based on your changing needs without the hassle of recruiting, training, and managing additional staff.

Check out our guide on how to choose a virtual bookkeeper for a walk-through of the process.

2. In-house Help With Back Office Duties

You should consider in-house help if you don’t yet have the volume of financial transactions to justify hiring a full-charge bookkeeper but you want the convenience of having someone who will work on-site and also can take on back-office duties like invoicing and bill pay. Many small businesses utilize receptionists and office managers to handle back-office accounting tasks.

Here are some scenarios when in-house help with back office duties might be a good option:

Operational efficiency and continuity: In-house back office support provides greater operational efficiency and continuity, especially during periods of organizational change or transition. Internal staff are more familiar with the company’s operations, systems, and processes, making them better equipped to adapt to changes and maintain business continuity without disruption to critical functions.
Tailored solutions and flexibility: In-house back office support allows for the development of tailored solutions and flexibility in addressing specific business needs. Unlike standardized services offered by external providers, in-house staff can adapt processes, procedures, and systems to meet the unique requirements of the business. This leads to more efficient operations.
Streamlined communication and collaboration: Having back office functions in-house facilitates streamlined communication and collaboration across different departments within the organization. In-house staff can work closely with other teams—such as sales, marketing, and operations—to coordinate activities, share information, and address business challenges more effectively. This results in improved overall productivity and performance. This needed collaboration makes it very difficult to outsource things like invoicing to an external bookkeeper.

3. Full-charge Bookkeeper

Deciding to hire a full-charge bookkeeper is best when you need a readily available bookkeeper at your disposal and have enough activity to keep them busy. As part of the job description, they can examine your company’s accounts, finances, and practices. If the bookkeeper is a certified public accountant (CPA), they can also handle tax compliance and provide management advice.

However, even if they don’t prepare your tax returns, they are extremely valuable in the process. A full-charge bookkeeper will serve as a point-of-contact for your tax accountant, with the ability to speak their language. An experienced bookkeeper understands what is needed to complete the tax return and is generally able to answer any questions that may arise because the books are in good order. This can end up saving you thousands of dollars in tax preparation fees.

Here are a few additional ways that a full-charge bookkeeper can help you:

Direct oversight and control: Hiring an internal bookkeeper allows for direct oversight and control over the accounting function. You can closely monitor their work, provide immediate feedback, and ensure alignment with your business objectives and policies.
In-depth understanding of your business: An internal bookkeeper can develop a deep understanding of your business operations, industry dynamics, and financial goals over time. This familiarity can lead to more customized and insightful financial management.
Confidentiality and security: Keeping financial information in-house can provide greater confidentiality and security compared to outsourcing to a third-party service provider. You can implement internal controls and protocols to safeguard sensitive data and mitigate risks of data breaches.
Immediate availability: An internal bookkeeper is readily available to address urgent accounting issues, answer inquiries, and provide on-demand support. This can be particularly valuable during busy periods or when you need immediate assistance with financial matters.
Cultural fit and company culture: Hiring an internal bookkeeper allows you to assess cultural fit and ensure alignment with your company culture and values. They can become an integral part of your team, contributing to a positive work environment and fostering collaboration.
Handling payroll: If you have employees, payroll management can be complex and time-consuming. A bookkeeper can handle payroll tasks such as calculating wages, withholding taxes, issuing paychecks, and filing payroll tax returns. This ensures that your employees are paid accurately and on time while staying compliant with tax laws and regulations.

Hiring your first bookkeeper can be difficult since there may not be anyone at your business with bookkeeping expertise. To help, we’ve developed 12 bookkeeper interview questions plus a downloadable skills assessment test.

4. Controller

A controller is a key financial management position responsible for overseeing the accounting operations of a company. They coordinate the activities of the lower-level bookkeepers and are ultimately responsible for the quality of the books. Controllers are needed when the bookkeeping function is so large it requires more than just a couple of full-time employees. While most small businesses won’t require a controller, it is another option if you have more complex needs.

Here are some situations when a controller would be needed:

Complex financial reporting: As a company grows, its financial reporting requirements become more complex. A controller is essential for managing these complexities, ensuring accurate and timely financial statements, and complying with regulatory standards, such as GAAP or International Financial Reporting Standards (IFRS).
Strategic financial planning and analysis: Controllers play a crucial role in strategic financial planning and analysis. They provide insights into financial performance, identify trends, analyze KPIs, and offer recommendations to support business decision-making. Their expertise helps in optimizing financial resources and achieving strategic objectives.
Internal controls and compliance: Controllers are responsible for establishing and maintaining effective internal controls to safeguard assets, prevent fraud, and ensure compliance with laws and regulations. They develop and enforce accounting policies and procedures to maintain the integrity of financial information and mitigate risks associated with financial transactions.
Budgeting and forecasting: Controllers oversee the budgeting and forecasting process, working closely with department heads and executives to develop realistic budgets, monitor performance against targets, and adjust forecasts as needed. They provide valuable insights into resource allocation, cost management, and revenue projections to support business planning and decision-making.
Audit preparation and management: Controllers play a critical role in audit preparation and management. They liaise with external auditors, provide necessary documentation and explanations, and ensure compliance with audit requirements. Their expertise in financial reporting and internal controls is instrumental in facilitating a smooth audit process and addressing any audit findings effectively.
Cash flow management: Controllers oversee cash flow management, monitoring cash inflows and outflows, optimizing working capital, and ensuring sufficient liquidity to meet operational needs and financial obligations. They develop cash flow forecasts, implement cash management strategies, and assess financing options to support business operations and growth initiatives.
Financial systems and technology: Controllers are often involved in selecting, implementing, and managing financial systems and technology solutions to streamline accounting processes, improve efficiency, and enhance reporting capabilities. They ensure the integration and compatibility of financial systems with other business systems and provide training and support to users.

Pros & Cons of Hiring a Bookkeeper


Pros	Cons
Bookkeepers are trained professionals with expertise in managing financial records.	It can be expensive, especially for small businesses or startups with limited budgets.
Hiring a bookkeeper frees up your time, allowing you to focus on core business activities.	Relying on a bookkeeper means entrusting them with sensitive financial data.
Well-organized books can help save costs of tax preparation.	Some have a narrow scope of expertise, focusing solely on basic tasks without offering broader financial advice.
Bookkeepers can provide valuable insights into your company’s financial health.	Miscommunications or misunderstandings can lead to errors or delays in financial reporting.
By helping to maintain accurate records, bookkeepers reduce the likelihood of errors.

Read our guide on how to hire a bookkeeper if you’re ready to take that step. It includes a free downloadable job template that you can customize.

Frequently Asked Questions (FAQs)

A bookkeeper can save you time by handling routine bookkeeping tasks, allowing you to focus on core business activities. Additionally, they can help you identify opportunities for cost savings, avoid late fees or penalties due to missed payments or tax deadlines, and ensure accurate financial reporting to support informed decision-making. Bookkeepers can also help tremendously with saving money on tax preparation fees by ensuring that your books are accurate.

The decision to hire an in-house bookkeeper or outsource bookkeeping services depends on factors such as your budget, the volume and complexity of your financial transactions, and your preferences for control and oversight. Outsourcing bookkeeping services can be cost-effective and flexible, while hiring an in-house bookkeeper may provide more direct oversight and integration with your team. If you need assistance with invoicing and paying bills, that may be more difficult to manage when outsourcing bookkeeping services.

Look for bookkeepers who have relevant education or certifications in accounting or bookkeeping, such as a degree in accounting or certification as a certified bookkeeper (CB). Experience with accounting software, attention to detail, and good communication skills are also important qualifications to consider. For more information, check out our article on what bookkeeping is and what a bookkeeper does.

Reasons to hire a bookkeeper include falling behind on invoicing or bill payments, experiencing cash flow problems due to inaccurate financial records, struggling to prepare financial reports or budgets, or facing difficulties providing your tax pro information during tax season.

Bottom Line

Determining when to hire a bookkeeper depends on various factors unique to each business. Whether opting for in-house support or leveraging online services, the decision includes considerations such as the complexity of financial transactions, regulatory compliance needs, and budgetary constraints. By assessing these factors carefully and aligning hiring decisions with business objectives, companies can ensure efficient financial management and position themselves for long-term success.

When To Hire a Bookkeeper for Your Growing Business + Best Options