When Scott Shaw, the co-owner of two restaurants in Miami, bought a majority interest in a local ice-cream wholesaler named Gelato di Roma, he made an unorthodox but eminently practical decision. "I soon came to realize that the company just wasn't ready to invest in the time and accounting know-how necessary to handle bookkeeping internally," he recalls.
Shaw had learned that lesson the hard way. "My first company was a small ice-cream business in Texas, and we -- meaning me -- did the bookkeeping ourselves," he says. "We were always at least a month late with our books, and I never truly had confidence that everything was right." Once he saw the benefits of well-run bookkeeping operations, which his restaurants were successful enough to support, he saw no reason to step back into the Dark Ages.
Gelato now contracts with a local firm called Bookkeepers Inc., which, in return for a $120 monthly fee, updates the company's financial records. "They've done everything they could to McDonaldize the process for us, which reduces our margin for error," he says. "We provide them with basic information, like employee names, jobs, and salaries. They worry about all the complicated things, like double-entry bookkeeping."
Shaw still writes and codes all checks, but it's now the outside bookkeepers' responsibility to organize and prepare the journals that then are passed on to the company's accountants at tax time.
When shopping for an outside bookkeeper, compare price, client recommendations, and educational credentials. (Shaw's bookkeepers are CPAs by training.) You can expect to pay about $15 to $20 an hour for outside bookkeeping services, a good bit less than CPAs would charge to clean up any bookkeeping disasters. Says Shaw: "Why wind up paying your CPA more than necessary because your books were so screwed up that they slowed down your tax preparation?"