What Does it Look Like to Work With a Bookkeeper?

Mar 16

Right now a lot of people are thinking about that as they're in the middle of tax season and they’re like, “Ooh, I really don't like to do this. I don't wanna be in this position when it comes next year, and next tax season.” So they're really thinking proactively on what it looks like to hire a bookkeeper. When should I hire a bookkeeper? What are the signs that I need to have a bookkeeper? What goes into actually getting the bookkeeping pricing? And then obviously, I’m very big on making sure you have a great and good bookkeeper that knows their stuff and knows the industry that you're in. So we're gonna be talking about all kinds of things like that and questions to ask bookkeepers whenever you're interviewing them.

There will be four posts in this series, maybe five if I come up with the fifth one. But today's post is going to be talking about outsourcing. What does it look like? Like what actually goes in? Like whenever people say, “Oh yeah, my bookkeeper did this!” or “I have a bookkeeper”, what does that actually mean? Do they do taxes?

Side note: no, I do not do taxes. And most bookkeepers that you'll find if you search on Instagram, and a lot of my colleagues, they do not do taxes either. Because there is a difference in bookkeepers, accountants and tax strategists. I won’t get into it for this post, but if you want to know more I did a whole podcast episode with my friend Kimberly (a tax strategist who DOES do taxes) that you can listen to.

In this post I’ll also address what it looks like whenever you bring on a bookkeeper that has a team (we are a team of six now). I do some bookkeeping, and then I have four bookkeepers, and an Administrative Assistant for me. So there are five of us inside of the books. So what does that look like for you? How do we guarantee that you're going to get the top-notch service whenever there are all five of us that are doing the books throughout the whole company? Ready to learn about the process of outsourcing your books? Keep reading to learn more.

What does a bookkeeper do?

A bookkeeper is somebody that really is in the month to month, day-to-day of your business. It's not somebody that does taxes or tax strategy per se. We are the foundation that your tax strategist and your CPA will build upon whenever a tax season comes. Our work comes throughout the whole entire year. And then whenever we start to get to the end of the year, like December and then January, we close out the books and that's whenever our busy season is because we are getting things ready for your tax preparer to be able to file and do the taxes.

Again, we are the foundation. You can't have a good tax strategy, you can't have your taxes filed on time without making sure that your books are up to date, accurate and 100% true. I cannot tell you how many times I've been inside a potential client's books and looking at things over, and I'm just like, "Hmm, have you filed these? Because this is inaccurate. Things have not been reconciled." So you have to either go back and amend or you have to file an extension if it's for that current tax year. So bookkeepers make sure everything's recorded properly and that everything's reconciled because it's not your tax strategist or your CPA's job to go in line by line.

That is our job. We go in line by line, expense by expense, income by income, and categorize things and make sure things are reported properly so that you can get your taxes filed. This is very important to keep in mind as this time of year is tax season, so we are right in the nitty gritty of everything. I've been talking with all of my clients, CPAs, just getting things tied up and sent into the IRS for them. It’s so much easier to do throughout the year then cramming it all into a few weeks to prep for taxes.

The process of onboarding and first reports

To start at the very beginning, when a client comes to us, we agree to work together. We start off our working relationship. The next thing that happens is they sign a contract, pay the first invoice. Do all those types of things. Then we hop on an onboarding call. So in that onboarding call, we really get to know their business. They go through the flow of money, how they receive payment. And a lot of this will be discussed in the discovery call as well, but this is to actually see it and be able to link all of the bank accounts. We also set up access to be able to see that money movement and record your income and expenses in either QuickBooks or Xero.

So on that onboarding call we go through, “Okay, how are you receiving payments?” is usually what I start with. That could be Stripe, PayPal, Dubsado, HoneyBook, etc. With any of those you can typically create an extra account or profile login, to where we have read-only access to see everything. And that's how we know how to categorize your income. We talk through what the best strategy is for you to categorize things so we know what it's for. This reduces the back and forth each month. So we can log into that payment processor or CRM and quickly categorize and be like, okay, we know what that $2,500 payment was for.

Again, we work through getting access to the ways that you receive payment. We also talk through making sure everything's set up properly on the way that those payment processors pay out, making sure they're hitting the right accounts, etc. Then we go to the actual bank accounts: checking, savings, whatever accounts you use, we get read-only access to that if your bank permits it. That means that we can login with our read-only access, and we can just go and pull the statements. We can't move money, we can't do anything like that, but we can get the information we need to be able to do our job.

Same thing with credit cards. Now, depending on your bank account and your credit cards, some don’t give read-only access. If they do not, you have the option to just send us the statements. We do need the statements some way, somehow, every single month to be able to reconcile and ensure that you are getting accurate financials. Depending on if you have a small local credit union or a small bank, you might just have to send us those statements. So we'll go through getting access to your bank accounts, making sure that we can get all of the data that we need, and then from there we link up your bank accounts to Xero or QuickBooks and make sure those are linked properly. That usually takes a little bit of time.

Then we talk through any questions you might have, any extra things that we might need to have from you. We gather information, EIN, phone number, things like that. All the onboarding stuff.

Bookkeeping cleanups

Then we talk through if there's any cleanup that needs to happen and what that actually entails. If you hop on with us in the middle of the year, we usually go back to the beginning of the year and do a catch up or a cleanup depending on the situation. We go through month by month and make sure things are reconciled, make sure we have access to everything. We make sure that if any bank accounts were opened or closed during that period of cleanup, that we talk through all of those in the onboarding call. And usually those onboarding calls last anywhere from 45 minutes to an hour. We really want to learn what your business does in your words.

After that onboarding call, we dive headfirst. If it's a catchup, we'll start at the beginning of the year. If it's cleanup, we'll make sure everything's clean and tidy. If we're just hopping in when we start at that current month, which is very rare. I get a lot of people that either don't have good enough books that we can save, whether they’ve had a bookkeeper or they're trying to do it themselves. We usually need to go back and change things up a little bit, recategorize some things. After the onboarding call and once everything is reconciled and caught up, we deliver first reports.

Understanding your Reports

Your reports consist of a profit and loss and a balance sheet. They are customized to you and your business to make sure that you understand exactly what is happening. We make sure you understand what your highest revenue source is, what your highest income source is, so you can focus all of the attention you need on each specific one. You also get to look at the trends in your highest and lowest expenses. Where you can spend more money if you are able to, where you need to cut back, things like that. Those are all in the reports we send, and then in that email you'll also get a simplified summary.

We put everything in English terms like, “Hey, this is what happened. This was your highest income source, this was your highest expense, this is your profit. These are the things to look out for. This is something that we saw.” If there's something different or something we wanna point out, then we go ahead and mention that in that email.

After we deliver those first reports, you and I hop on a recap call to go over them, because obviously if we give you reports every single month and you don't understand them, then they're not really doing you any favors. We want you to be able to look at those reports that we give you and know exactly what they mean. And then if you don't understand the reports every single month or you have a question, we make sure that you understand those customized reports. From there, the onboarding process is complete. We have done our job of categorizing everything and we go line by line guys, like literally line by line.

So you might have 200 transactions every single month. We go through line by line and split out your processing fees and income, and make sure things are recorded properly. That ensures that your taxes are done great at the end of the year and you're able to make strategic decisions throughout the middle of the year, month by month.

What the monthly bookkeeping actually looks like

Once the onboarding process is complete, we move straight into the monthly bookkeeping process to where we will go in, throughout the month, categorize things. Then at the end of the month, if there's any questions we might have on certain transactions, we'll send you an email and ask for clarification on those transactions. We'll have a list of the date, who you paid, or who you got income or sales from, and the amount. Then you can verify what they were for, because we want to make sure that we code everything properly and not guess. There's absolutely no guessing around here, so we make sure that we know what you are doing in your business.

With that clarification we need on any transactions we'll go in and finish categorizing and coding everything. We will go into every single account and do a reconciliation process, which is basically making sure that every transaction matches up with what the bank statement says and what the credit card statement says. If you're not doing that right now, let's make sure that we get on that. When the reconciliation process is done, we know that our numbers are accurate, and everything's recorded. Then we pull those reports, send you that email similar to your first report.

Every single month you’ll get your profit and loss reports, balance sheet reports, and then the simplified summary. We have to wait till the month closes to be able to have all the data to go in and do all of our stuff. We 100% guarantee to get your reports out by the 15th of the month, but really try to get them out by the 7th or 10th. For example, all of the February reports were sent out by the 7th or the 10th of March.

The cool thing is that it does not stop there. I am not your traditional bookkeeper. We are here to support you and we understand that as a Creative, sometimes these reports are confusing. Sometimes you don't wanna open them. The numbers are scary sometimes, and we are here to help you with that. We are here to make sure you understand what's going on, and if you're feeling overwhelmed and stressed out about numbers, we're here to talk.

We're here to help you make strategic decisions based on the factual numbers that are in your business. If you're making a bunch of money, okay, great, awesome. How can we reinvest that to help create and build wealth? On top of that, if you are in the red and you're losing money, what do we need to do to be able to really boost up those profit margins and get you actually making money? We walk through things like what is the best way for you to pay yourself?

I would say like 40% of people come to me as an S-corp, but a lot of times they'll come to me as an LLC or a sole proprietor. From there we keep an eye on when it might be time to switch to an S corp. There is good and bad to it, more on that here. Basically what will happen is we'll facilitate that discussion with your tax preparer. We're quarterbacking all the different things with your tax preparer and then if you have a financial advisor for investments and retirement funds, we also help with that. That’s what’s nice is we facilitate those questions and conversations with those key people, and make sure things are taken care of.

The value of having a bookkeeper

What a lot of my clients are experiencing (and a lot of new clients that came on with us in 2022) this tax season, is they can just take a step back and they don't really have to do anything. All of their stuff is done because we have done it throughout the whole year. Once we finalize those reports at the end of the year, typically by January 15th, we email you with the final reports. This is what you'll give your accountant. If we have communication with your tax preparer (which we 100% recommend. It is great to have all of us in the loop) then we send an email to them as well. That way they have everything they need to do for filing your taxes. You don't have to do anything as the client! You just sit back and observe the conversation in case there’s anything else we need. I would almost guarantee that you probably don't fully understand debits, credits and journal entries, so I work with your CPA to make sure that your books match exactly what the tax return says. It’s an ongoing process with me and your tax preparer until your taxes are filed.

None of my clients have had to worry about taxes in this first quarter of the year. They haven't had to stay up late stressing about things. Instead, they've been growing their business and focusing on the things that bring them joy, the profit producing side of their business, to accomplish their goals and dreams. Contrast that with going back through last January, February, March, and all of 2022 to figure out what all those transactions were for. I guarantee that most of the time things are going to be missed and skipped, and you might be paying the IRS more in taxes because you're not keeping track of everything when it's happening.

Having a bookkeeper ensures that you have everything recorded and reconciled, and that you have a clear picture of your finances. Why does that matter? So that you can strategically make decisions that will increase profitability, grow your business, and help you accomplish your goals and dreams. With our team you also have unlimited support from us through Voxer. You can text me, you can email me. I want you to feel supported and make sure you understand what's going on. If you have questions on your business, if you need to talk through hiring a new team member, those are discussions you need to be having with your bookkeeper.

Bringing on a bookkeeper with a team

So obviously everyone's a little bit different, but I want to walk through our process of working with our team. I am the one doing the sales calls. I'm the one onboarding you and I do the recap call. However I do have bookkeepers that help you because I'm not able to do everything. So I have brought on a team and I train and help them understand your business and the industry so they can help support me, so I can support you. You won’t have contact with all of my bookkeepers, but you’ll be assigned one. Right now my bookkeepers are April, Stacey, Cherith and Julie. Whoever you’re assigned will do all of the question emails like, “Hey, can you give us clarification on these transactions?” They’ll code, reconcile, and send you the reports. I am still over your account, review everything and make sure everything's good to go. If you have any questions, you can 100% talk to me, email me, vox me, text me, whatever it is. You can also talk to your assigned bookkeeper, as they are doing your bookkeeping and they're seeing everything and making sure it is getting done right.

I'm very specific with the type of people that I bring on my team, making sure they are qualified and certified. That they know what they're doing. They understand your business, they understand the creative, online space. They know exactly how to do things. If they have questions, they always come to me and I'm able to help them out. And again, we are really big on making sure that you feel supported through the whole process! I’m excited about the dream team that I’ve built over the last couple of years. So you're in good hands.

I hope this post was helpful! The next one in this series will be all about when to know it's time to hire a bookkeeper. Signs that you need a bookkeeper and signs to know when you don't need one. Should I bring on a bookkeeper or not? How should I do my books? How should I outsource? When do I know all these things? That will all be answered in the next post.

If you have any questions, you can let me know. And if you’re interested, you can always fill out our contact form and I can reach out to you. It’s a very good time to bring on a bookkeeper. If you're stressed out and overwhelmed because you're trying to get all of your ducks in a row to send to your tax accountant to file taxes, it might be time to bring on a bookkeeper. It might be time to be proactive to where when it gets to next year, next tax season, and next March, you're not stressed out and you are just able to grow your business. You're able to sit back, relax and enjoy life.

When Should I Hire a Bookkeeper?
What’s the Cost of Monthly Bookkeeping?
10 Questions to Ask When Interviewing a Bookkeeper