Ask Julia: Should I hire a bookkeeper?

Dear Julia:
We are talking more seriously about hiring a bookkeeper – finances just keep getting de-prioritized as on-farm work needs to get done – and wondering if you have recommendations and methodology for working with people around sensitive data and personalized systems.

~ Boots Farmer

Dear Boots:

First, congratulations for seeing the importance of financial management and asking for help when you can’t do it all yourself.

Second, I know I preach a lot about bookkeeping, and the importance of understanding your numbers. Even if you hire someone to take care of your books, it’s still important to look at your cash flow and profitably on a regular basis. After all, it’s still your business.

To answer your questions…

Should you hire someone?
You’ve spent a lot of time on your bookkeeping systems, and you have a strong handle on your finances. If you hire someone, you will lose that day-to-day touch that will allow you to really understand your numbers. Clearly, you cannot do it all yourself; nor is it reasonable to think you can. The question is, where do you hire help? Do you hire a bookkeeper so you can spend more time in the field? Or do you hire field-crew so you can spend more time in the office.

Some considerations:

• Obviously, you started farming because you want to farm not spend your days in the office. That said, some people enjoy the variety and welcome the opportunity for less physical labor.
• What is the cost to hire additional field crew vs. a bookkeeper? Generally speaking, it is less expensive to hire field crew ($15/hour vs. $60/hour for a bookkeeper). In addition, both roles need training. Is it more time consuming to train field crew or a new bookkeeper? Dollar for dollar, you probably are better off hiring field crew to allow you the time to keep up with the bookkeeping. In other words, what’s the best, more cost-effective use of your time? That said, not everyone has a strong pulse on their books the way you do; so considering the best use of time may not the same for others.

I can’t offer advice on hiring field crew, but if decide to go hire a bookkeeper here are some additional thoughts and considerations.

Expected costs
Independent bookkeepers can charge anywhere from $25/hour to $60/hour; you will pay more for a bookkeeper who’s part of a firm because they have more overhead.

The old maxim holds true: “you get what you pay for.” This can be especially important if you have a complicated online payment systems like Square. Even the most experienced bookkeepers can get knotted up here.

If you hire a bookkeeper on the lower end of the cost-spectrum, expect that they will be more about data entry, and you will need to coach them on your systems – how to record the more complicated transactions and how to categorize the different types of transactions. You will likely need to check-up on them more. Don’t expect them to clean-up any legacy mistakes lingering in your books.

As you go up the pay-scale, you can expect that they will know how to categorize different types of transactions, and will know short-cuts in QuickBooks. They can probably manage your books more quickly than you can. They can clean things up so your reports are more informative. And they can help you capture the information you need to make decisions.

How do you ensure private data stays private?
There are a few ways to ensure your data stays private:

• Do not give online banking access to your bookkeeper. You can set up the downloads to QuickBooks, and then give your bookkeeper access to your QuickBooks file.
• If you’re using QuickBooks Online, you can restrict the access of any users. For example, you can limit their use to the bank feed and/or invoicing.
• Do not give check-signing privileges to the bookkeeper. You can maintain control of paying all bills and writing checks.

How do you vet a new bookkeeper?
The best way to vet a new bookkeeper is to start with a referral from a fellow farmer/friend (see below for my referral). They can give you an honest assessment of the bookkeeper and their strengths.

Regardless of if you find someone who comes highly recommended or not, you can still:

• Ask for references; and call them!
• Ask them how they keep your secure log in information stored.
• Find out if they have liability and cyber insurance.
• Google them and read online reviews.

Any change to your business and systems take time. I’ll glad to see you’re thinking it through now so things will be easier as you make the transition.

For those of you who are bookkeepers, or have hired bookkeepers: what other tips and thoughts would you offer Boots?

If you need a referral for a bookkeeper, I always recommend my friends at Kitchen Table Consultants.