The bootstrapped solopreneurs of New York City impress me. You can balance sales, marketing, operations and administration: you're all warriors and you have my respect. As your clients multiply there comes a time when you need to let go of some of your responsibilities. Giving up control can be scary, we get it, but so is burnout. Let's look at a common scenario.
Here is a story we often hear from solopreneurs: you just finished a super productive week. Suddenly it's Sunday and you must choose between spending time with your friends or family, doing client work or catching up on administrative tasks.
The solution? Outsource the tasks that someone else can do better, and focus on building your business and fitting in relaxation time with friends and family.Unless you are a CPA or a bookkeeper, the amount of time you’ll need to spend to learn how to do your own bookkeeping could be better spent on building your business. Consider the bookkeeping solution that is right for you:
- Talk to your CPA: Some CPA companies have bookkeepers on staff. Make sure they have the bandwidth to handle day to day bookkeeping—CPAs generally focus on taxes. And if your CPA does not provide bookkeeping services, he or she may be able to recommend a bookkeeping services provider.
- Local solo bookkeeper: Ask how long they have been in business and for at least three referrals. With sole proprietor bookkeepers, turnover is a risk. It can be very disruptive to lose a great bookkeeper and have to find and train a replacement.
- Local bookkeeping services company: This option delivers the benefits of a local solo bookkeeper without the concern of turnover. Because they have multiple team members you would have continuity of service if person assigned to your account left the company. Depending on the company, they may also offer additional services, such as operational support, financial reporting, budgeting and analysis as well as payroll and human resources administration.
Set Yourself up for Success
Whatever choice you make, these tips will help you make the arrangement successful:
- Set Expectations. Think about when you need to report to your bank, investors, or Board of directors and request reports to line up with those dates. Establish clear expectations about your reporting requirements.
- Meet the Team. The person you meet initially with might not be the person who works on your account. Find out who will be assigned to work with you specifically, and schedule a phone call to learn more about them and how they will work with you. Learn about their onboarding process and make sure they get to know the specific needs of your business.
- Improve your Bookkeeping Systems. Discuss how they will assess your current bookkeeping system for opportunities to improve. For example, is your chart of accounts set up alphabetically or in a way that highlights the data important to your business?
- Request Financial Reports. Find out if the bookkeeping services provider will be able to provide reports that will help you make better business decisions—for example, measuring your profit on a per client or project basis. This is critical if you want to grow and continue to delegate administrative tasks or hire employees.
- Plan for Growth. Make sure the bookkeeping company can keep pace with your growth and be able to provide additional services as you need them. Ask about their services regarding invoicing, collections, cash projections, budgeting and burn rate management. You may not need each of these today, but as you grow your needs will become more complex. It is easier to stay with the same bookkeeping company who knows your business than to have to begin again with a new company.