When should I hire a bookkeeper?

Hire a bookkeeper when your books are consistently two or more months behind, you’re spending over 5 hours per month on bookkeeping, or your annual revenue exceeds $250k.

Other signs you need help include making business decisions without knowing if you’re profitable, dreading tax season because nothing is organized, getting correction requests from your CPA before they can file your return, or missing financial deadlines because bookkeeping keeps getting pushed to the bottom of your list.

If bookkeeping is taking time away from revenue-generating work or you’re losing sleep over whether your numbers are right, it’s time to hire professional help.

The cost of hiring someone is usually less than the value of your time spent doing it yourself, especially once you factor in errors, missed deductions, and late filing penalties.

What is the best bookkeeping software?

QuickBooks Online is the standard for most small businesses. Xero works well too. The best software is the one your bookkeeper knows and your accountant can work with.

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What is job costing?

Job costing tracks all costs associated with a specific project or job so you know if that work was profitable after accounting for materials, labor, and overhead.

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Should I use cash or accrual accounting?

Most small businesses under $5M in revenue use cash basis because it's simpler and matches cash flow. Accrual is required for larger businesses and inventory.

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How often should bookkeeping be done?

Bookkeeping should be done monthly at minimum. Weekly is better for high-volume businesses. Waiting longer than a month means errors compound and records get forgotten.

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What is payroll tax?

Payroll tax is the federal and state taxes you withhold from employee paychecks and pay on wages. This includes Social Security, Medicare, unemployment, and income tax withholding.

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