Personal finance management can be a challenge. Between keeping up with expenses and bills, saving for future needs, and getting ready for tax time, these obligations demand ongoing focus and mindful planning. That’s where a personal bookkeeper comes in. A professional bookkeeper can simplify your monetary affairs a lot, it will become simpler, less stressful and also more efficient.
What Does a Personal Bookkeeper Do?
Personal bookkeepers, who work for individuals, are usually referred to as bookkeepers. Whereas an accountant is more oriented toward higher-level financial analysis and advice, a bookkeeper is charged with the day-to-day maintenance of accurate records in any business, whether onsite or remote. They make it very easy to have a record of what you are spending your money on and that can be extremely useful when you want to budget or just for tax or general financial purposes.
Key Duties of a Personal Bookkeeper
A bookkeeper is responsible for many financial and accounting tasks:
- Expense Tracking: Recording your daily transactions and classifying them.
- Bill Pay: Paying your bills (like utilities, and mortgage) on time.
- Reconciliation of Bank Statement: Comparing bank records with your records to verify the balances.
- Financial Reporting: You will be able to generate monthly or quarterly reports which all give you a visual of your financial health.
- Tax preparation support: A bookkeeper doesn’t file your taxes, but they will get your financial documents in order so you can provide everything your accountant needs during tax season.
Why Should You Hire a Personal Bookkeeper?
A lot of individuals doubt the importance of a bookkeeper. At first glance, it looks like a waste of money to do but the benefits if and when everything goes to plan are worth it, it is quite a heavy investment, but only if you are finding managing your money hard to deal with.
1. Better Financial Structure
A private bookkeeper ensures that your bookkeeping stays in order and that your transactions are recorded correctly. This organization gives you full visibility of where your money is going and aids you in preparing for future costs.
2. Time Savings
You have to work to take care of your money. Hire a bookkeeper will benefit you, and allow you to focus on the things you enjoy most, family, work, hobbies, etc.).
3. Stress Reduction
Finances are difficult to manage no matter what time of year, especially when it’s tax season or you need to check in between all of your accounts regularly. A bookkeeper can take the stress off of you by processing all of the detailed financial information and keeping everything straight.
4. Better Decision-Making
With a monthly or even weekly financial report done by a bookkeeper, there will be no surprise about how your finances are doing. Such information can mean smarter decisions, for example, about saving investing or spending.
5. Tax Preparation Assistance
When everything is in order, tax season becomes smoother by a long shot. Your bookkeeper can assist you by making sure all your financial records are in order, streamlining the process of getting your taxes filed and reducing stress.
Personal Bookkeeper vs. Accountant: What's the Difference?
However, both bookkeepers and accountants handle financial data, in a different way.
Personal Bookkeeper: Specializes in tracking day-to-day amounts of money received or paid which includes income, day income, expenses, taxes, shopping, and daily expenses. They make sure everything is kept tidy for your socioeconomic history.
Accountant Offers more advanced financial services, including tax planning, accounting and auditing, and related advice. A CPA looks over financial documents and makes strategic recommendations for long-term financial goals.
In essence, the volume-keeper is in charge of your company’s daily finances, while the accountant serves a more strategic function.
How Much Does a Personal Bookkeeper Cost?
The price of a private bookkeeper can depend on things like where you live, how complicated your finances are, the specific services you need, and a range of other considerations. On average, you can expect to pay:
- Hourly Rates: $22 to $35 an hour, based on experience.
- Monthly Fees: From $500 to $2,500, depending on the amount of service desired.
It’s a good idea to talk about fees upfront so that everything is clear to avoid any surprises and to make sure the services fall within your budget.
Selecting the Best Personal Bookkeeper
What to consider before you choose your bookkeeper:
Experience
Hire a bookkeeper with experience handling personal finances. In an ideal world, they will have experience managing the financial activities you need help with — be it routine budgeting and bill paying or tax preparation.
Compatibility
You’ll be revealing sensitive financial information, so it’s important to select a personal bookkeeper with whom you feel comfortable. Be sure they communicate well and you can trust them.
Technology
The majority of bookkeepers rely on financial software like QuickBooks Online, Xero, or FreshBooks. If you are already okay with these tools then consider hiring a bookkeeper who is familiar with the software you use.
Pricing
Again, bookkeeper fees vary from firm to firm. Make sure to go through pricing upfront to make sure their services match your budget.
How Working with a Personal Bookkeeper Goes
When you hire a personal bookkeeper, one of the first tasks is to collect all the documents related to your financial life — bank statements, receipts, invoices, and credit card statements. Your bookkeeper is going to sort and classify those transactions, reconcile your accounts, and give you end-of-period financial statements to peruse.
From there you will have scheduled (usually monthly) meetings with your bookkeeper to go over any concerns and discuss where your business stands financially. For this long-standing relationship, you will be able to keep your financials in good order as you can tweak things along the way as your financial scenario changes.
Related Article | Hire a Bookkeeper for Your Small Business Accounting
Conclusion
Having a bookkeeper that you hire personally can save you time and help you keep organized. Through keeping your financials in order, your spending in check, and offering routine updates, a bookkeeper helps you maintain a healthy financial life. Whether you’re feeling pressured, don’t have time or aren’t interested in keeping up with your books, hiring a bookkeeper will make perfect sense for your future financial well-being.
