Do you run your own small business and try to do it all yourself? Why? Shouldnt you spend your time doing what you do best- whether it is selling and marketing, customer service or making decisions on how to grow your business?

An entrepreneur tries to juggle many balls each day, but sooner or later one of them is going to be dropped. A smart business owner will realize that he/she cant do everything because there are only 24 hours in a day. Unless you are extremely organized and enjoy working with numbers, then maybe you need to outsource this job. Too many business owners spend their time doing what they are not very good at simply because they dont know how to go about finding someone to do that job for them.

Where do you start? Ask your accountant for referrals. Obviously you dont need a full-time person to do your books, so your best bet is to look for someone who wants to moonlight at a part-time job. There are also bookkeepers with their own small business who are looking for clients. If you dont have any other employees, this situation will work best for you because you can pay them as a subcontractor instead of an employee on payroll. However, you will need to give them a Form 1099 at year end for tax purposes. But, since they are accounting experts, they can help you with that task too.

You should interview your prospective bookkeeper just as you would if you were hiring him/her as an employee. Ask for a resume and references, and check them out. Since this person will be handling your confidential records, you want someone who is trustworthy.

Depending on your location, you should expect to pay between $15 and $50 an hour for a bookkeeper. Dont necessarily hire the one who offers the lowest rate- remember you get what you pay for. The more experienced person will cost you more, but will provide valuable input and suggestions to streamline your business that will wind up saving you money in the long run.

Since this person will be working closely with you in your business, you should feel comfortable with him or her. If you have any reservations about this person, go on to the next candidate.

While the selection process may take a while, it will be worth it later. Take your time to find the perfect bookkeeper, and in a few months youll wonder how you ever managed to run your business before you hired one.

What is a role of a bookkeeper in your organization? Bookkeepers keep complete, up-to-date, and accurate records of accounts and financial arrangements. Bookkeepers verify and enter information into journals and ledgers or into a computer. They periodically balance the books and compile reports and financial statements. Bookkeepers also receive, record, bank and pay out cash. They balance checkbooks with monthly bank statements. They may calculate employee wages from plant records or time cards and issue payroll checks. Some of the other work they may do includes posting accounts receivable and payable, prepare and make bank deposits, record payrolls, maintain inventory records, purchase supplies, prepare purchase orders and do expense reports. Bookkeepers may also make schedules, sort documents, and file bills. These type of jobs are found in every industry and may have various job titles, such as accounts payable clerk, accounts receivable clerk or assistant bookkeeper. Cost of a Bookkeeper : The pay for these jobs depends upon experience, clerical skills, the level of responsibility and the job location. Beginning salaries go from minimum wage to $ 15 per hour. Experienced Bookkeeper can make $ 20 an hour. After having worked for three years with the same firm, a Bookkeeper can earn at $ 25 per hour. A Bookkeepers usually work 40 hours a week; sometimes it may be necessary to work overtime. Some employers have fringe benefits such as paid vacations and sick leave, life and health insurance, and bonuses. Other benefits that the employer may include are participation in a credit union, or retirement and profit sharing plans. Advantage of outsourcing Bookkeeping work to a professional bookkeeper : There are several distinct advantages to outsourcing your bookkeeping functions. First and foremost is saving money. You get what you pay for and if you don’t pay for quality than you won’t have quality service. However, you can save money by outsourcing because you won’t be paying for employer payroll tax expense, workman’s compensation and general liability insurances, vacation time, sick time, health insurance and other benefits a good full time bookkeeper will expect from his/her employer. Just remember, however, that these costs will be built into the consultant’s hourly rate and their fee will reflect these costs. Any bookkeeping consultant who has not taken these costs into consideration is not a bookkeeper you want – if they don’t know enough to include these costs into their fees, then they don’t know enough to be a help to your business. You should expect to pay at least three times what you would pay an experienced full charge bookkeeper. And just how do you save money by paying three times the amount you would pay an employee? Well, let’s see. There will be no recruiting, interviewing and training costs for start. And if you should find yourself unhappy with the services there will be no additional recruiting, interviewing and training to replace your bookkeeper. Also, you will not have to be concerned about law suits such as sexual harassment, unlawful firing, age discrimination, sexist, etc. Or an increase in your unemployment rates because you laid off an employee that you really wanted to fire but had no lawful cause to do so. So right away we have less time and money spent and potentially less hassle if things don’t go well. And of course you will not be paying workman’s compensation and general liability insurance premiums. Also any worthy bookkeeper will expect at least two weeks vacation, coverage for sick time, health and dental insurance and even perhaps more benefits. Most professional bookkeepers will have their own offices saving you space within your office. So you will not be buying that extra desk, calculator, computer and computer software. Your bookkeeper will be providing all of that as part of his/her fee. No software updates, computer maintenance, training costs, etc. Of course should you prefer to have your computerized bookkeeping records available to you at your office, a small investment in software installed on your computer makes this possible. Also no office supplies to be paid for. You will be amazed at just how much pens, pencils, and paper can be used by a bookkeeper. Your consultant bookkeeper will either ask you to drop off the work at their office, will pick it up at your office or some may even offer remote bookkeeping service. And by having your bookkeeping done off site, your bookkeeper will be able to work more efficiently and accurately because her/his office will most likely offer less distractions than your busy office. All of this is saving you money. And the best reason for outsourcing is that you control the amount of money spent on bookkeeping. What I mean by this is that the person you hire to do your bookkeeping will be doing just that – not answering the phone, dealing with drop-bys, chatting to other employees, etc. Also you can start with just a few hours a month and add on when you need to and then adjust downward again should it be necessary. Can you imagine finding an employee to start with only four hours a month, then asking them to put in 20 hours a week for awhile and then back down to four hours a month again. I don’t think you would keep them for very long, but a free lance bookkeeper is able to work around these variables and even more importantly expects to work with flexible schedules.

The best thing you can do is to think about taxes before then year ends. Most people wait until the tax filing deadline before they ask how they can reduce their income taxes. Unfortunately, once 2007 ends, there’s very little you can do to minimize your taxes for 2007. To start your tax planning, you should review your income, deductions and withholdings before the year ends. Which means you need to get your bookkeeping caught up! You should use a software program, such as QuickBooks, Quicken Home and Business, or spreadsheets to keep track of your income and expenses for your business. Once you’re bookkeeping is caught up… do you expect your home business to have a profit or a loss this year? If you have a profit, here are some tax planning tips to help minimize your home business taxes this year: 1. Defer your income. If you have a home based business and it looks like you’ll have a good profit this year, consider invoicing your clients in January instead of December, to defer the income to next year. Or, just wait until the end of December to send invoices. Any money you receive in January will go on your 2008 tax return, not 2007. 2. Accelerate expenses. Do you need to purchase any inventory? What about supplies? Does your computer need to be replaced? If you’ve got a profit for 2007, consider purchasing inventory, supplies or other items that will need to be replaced soon this year to reduce your taxable profit. In addition, if you itemize your tax deductions, make sure you pay all mortgage payments, property tax, medical expenses, etc. this year, even if they aren’t due ’till next year, to help increase your tax deductions for this year. 3. Contribute the maximum amount to retirement plans. As a home based business owner, you have several retirement plans to choose from. You can setup a traditional IRA, a SEP IRA, a Simple IRA, or even a 401K. The maximum contribution amounts vary based on the retirement plan, but these plans allow contributions from $4,000 up to $44,000 per year. Contributing to a retirement plan is a great way to maximize your retirement savings and to minimize your taxes at the same time. 4. Give to charity. Although charitable donations don’t reduce your business income, they do reduce your taxable income if you itemize your deductions. Gifts of cash or goods are a great way to help reduce your tax bill this year. On the flip side, if you expect a larger profit next year, or if you expect to jump into a higher tax bracket next year, it’s best to report as much income this year, and to defer as many expenses as possible ’till next year. Either way, year end tax planning can really help minimize your taxes. But you have to make it a point to review your taxes before the year ends. Once 2007 is gone, so are your tax planning opportunities for 2007.

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Do you love the thought of handling the financial books for your business? For most of us, unless you do bookkeeping for a living, the answer to that question is probably no. How much time does it take you on either a daily or weekly basis to handle this task? If you are finding it is taking too much time away from what your focus should be, it may be time to consider hiring someone to help. Here are a few signs that it may be time to hire a bookkeeper: 1) You loathe the thought of even opening your financial software program. 2) You find yourself in the office way past your normal working hours tackling bookkeeping issues. 3) Your frustration level grows higher each time you work on your books. 4) At tax time you stumble to get your paperwork together for your accountant or CPA. Sometimes it’s better to free up your time for those things that are more important to you and to the success of your business. Listen to your inner wisdom, and if/when the time is right and your budget will allow, hire someone to take off the pressure. Your peace of mind will be well worth it.