This may seem like an odd choice to make but is a decision people make when trying to economize. The logic is that an unqualified bookkeeper will cost less, but have the same basic skills that a professional bookkeeper would have. To a small business this may seem to be all that is necessary. It is a very bad mistake and ought to be avoided. A professional bookkeeper is paid for expertise. It is the extra body of knowledge such a person possesses that makes him or her stand out from an unqualified bookkeeper. That additional understanding of accounting, plus some other considerations, can prevent a lot of problems.
Staying current in taxes and other issues
Bookkeepers don’t just crunch numbers. The American Institute of Professional Bookkeepers (AIPB) requires that members adhere to a code of ethics, and pass a national examination prior to being becoming a Certified Bookkeeper (CB). The Institute also has continued education programs that educate a professional bookkeeper on the current state of taxes and how to process payroll forms completely and accurately. Accounting issues such as inventory and cash flows are also part of the continuing education curriculum.
An unqualified bookkeeper may feel no pressing obligation to stay current with the developments in bookkeeping. That doesn’t just put a
small business in jeopardy with tax law, but creates some serious inefficiency as well. Bookkeeping is a means of managing money effectively; properly kept ledgers show expenses and also where the money is coming from. Techniques change over time, and there are new ways of tabulating figures that are more computerized. A unqualified bookkeeper may not be familiar with various types of software, including QuickBooks and Peachtree. The result can be hours spent balancing books and recording transactions; all of these have to be paid for in the form of wages or fees to the bookkeeper.
A professional bookkeeper is aware of the latest changes in generally accepted accounting procedures among other matters. Advanced knowledge means less time spent processing details. A professional bookkeeper may cost more than unqualified bookkeeper at first glance. However, when it is taken into consideration the amount of time needed to work on a given bookkeeping project, the professional will spend less time and in the long run will probably cost less than a person who is less qualified.
Speaking of cost
The hourly rate for an unqualified bookkeeper may seem low, but if this person is hired by a small business the costs begin to increase. These costs are the ones not just related to wages: workers compensation premiums, employee benefits, payroll taxes, etc. There are also the other
costs such as vacation and sick days. The business may also have to purchase the software and the equipment necessary for this individual to be able to work. All of this is on top of the fact that the same individual, who may be energetic and very hard-working, does not have extensive expertise in bookkeeping. Factoring in all of these variables makes it extremely obvious that an unqualified bookkeeper is really not a cost savings.
A professional bookkeeper, especially somebody who is connected to a bookkeeping service, doesn’t generate these types of costs. Assuming that a business owner will contract out for services, the professional bookkeeper already has the software and equipment necessary to do the job. Even better, the business owner doesn’t have to worry about employee benefits or time off with pay. That is all something that the professional bookkeeper and his or her company have to worry about. The contracting company also benefits from whatever the bookkeeping service firm provides to its clients. This can be informative newsletters, special discounts on certain services, and certainly the state-of-the-art expertise of the service rendered. Is a situation in which a small business definitely stands to benefit.
The business world is a very demanding marketplace. A company has to have accurate figures to determine where the money is going, and all reports to public agencies must be complete. There is no room for error and no time to coach somebody on how to maintain the books. A professional bookkeeper can hit the ground running and see to it that the financial records and data are all in good order. Time is money and a professional will waste neither. That is the primary reason to invest in a professional bookkeeper and not bother with an unqualified one.