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One of the hardest elements of starting a business is realizing that the only way you can keep your expenses low is… to do EVERYTHING yourself.
For many new businesses, choosing the right accounting software, setting up the list of the accounts, and recording transactions becomes the responsibility of the business owner.
Personally, I have used Peachtree and QuickBooks for my small businesses and also have had general ledger / general journal responsibilities for the companies I have worked for.
Other business people have not. Eventually, there comes a time when you have no choice but to invest in a bookkeeper.
But how? The hardest challenge for me was to get past some of the horror stories I have read about small businesses being brought to their knees over employee theft due to money mismanagement.
Here are our top 10 questions you should ask yourself AND your prospective or current bookkeeper:
- Are your bookkeepers cost effective and do they add value to your business?
- If I use a bookkeeper, will the time I free up enable me to make more profit than if keep doing the books myself?
- Do you expect your bookkeepers to take greater responsibility than processing and filing? You should.
- Are your bookkeepers happy to link with your own accountant, and is your accountant happy for you to choose your bookkeeper?
- Are your financial statements more than two months behind? If so, either fire your bookkeeper, or if you don’t have one – get one!
- Do you have someone who understands your business and who will give you sound advice? Can you do this with your bookkeepers?
- How secure is the data that your bookkeepers hold for your business?
- Does your bookkeeper have a network of professional advisers who could be useful to your business?
- Can your bookkeepers give you a bespoke service, or do you have to fit into their set packages?
- It’s not enough to like them, do you trust your bookkeepers to be part of your team?
How to Find the Right Bookkeeper for Your Business
Keeping the books is one of those fundamental business tasks that doesn’t appeal to most entrepreneurs. For that reason, one of the first tasks that many small business owners perform is to find a bookkeeper. Bookkeepers come in all shapes and sizes, from part-time, home-based individuals to bookkeeping services.
When you try and find a bookkeeper, you should look for several traits, first and foremost being honesty. Your bookkeeper will be entering deposits and checks and balancing accounts, as well as producing the very sorts of financial reports designed to reveal the existence of problems such as fraud and theft. You need to be able to trust them.
Your bookkeeper should understand basic business accounting, such as types of accounts and how to produce essential reports, like the income statement, balance sheet, and cash flow statement. That’s why it’s best to seek someone with experience and the references to prove it, and not a trustworthy friend or relative who lacks these essential skills. Ideally, you’ll find a bookkeeper with accounting experience for other businesses in your industry.
It’s also vital that your bookkeeper is familiar with modern small business accounting packages. Today’s bookkeeping and financial systems are heavily automated, even for the smallest of businesses. Pen and ink bookkeeping sufficed for small businesses in the old days, but today your “books” had better be kept on a hard drive, not a shelf. Digital data allows for much simpler, faster, and more sophisticated analysis of your company’s information.
Detail oriented people tend to be the best bookkeepers. In fact, when it comes to making the books balance at the end of the month; a very detail oriented person will have the level of accuracy and precision that the task requires. Someone who wants to categorize every expense item as “miscellaneous,” for instance, isn’t going to do you much good at the end of the month.
While taking care of all those details, a good bookkeeper won’t get bogged down in them. When you find a bookkeeper, you need to be able to count on timely completion of critical tasks, such as bank statement reconciliation and preparation of monthly financial reports. If problems arise, you need to know that your bookkeeper will inform you in time to do something about them.
Excellent communication skills aren’t normally associated with folks who talk of debits and credits, but the best bookkeepers are more than silent number crunchers. You need to be able to explain to your bookkeeper what you want, and any problems or issues that come up should be communicated to you clearly and thoroughly.
Personality is another trait most people don’t consider when it comes to bookkeepers. But you’ll be spending plenty of time with your bookkeeper, explaining what’s going on in your business and asking questions about what the numbers show. It’s important to find someone who you can get along with and relate to.
Even while making sure your bookkeeper meets these requirements, remember that bookkeepers aren’t accountants. They don’t need to have mastered tax planning or financial analysis. No matter how good your bookkeeper, you still need an accountant to help you with these and other advanced technical tasks.
3 Comments
I am thinking about honesty and payments in bank. Is this not solution? Bookkeeper prepares payments but business owner approves prepared payments…
Only question about number of payments… if many payments, then business owner has no possibility to check them all
Bookkeeper recently posted..Home page
If I may add a small tip; you should ask yourself on what skills you should look for in a bookkeeper. Because for me, I think you should look for someone who is bright, trained in accounting and bookkeeping and is open to learn more. You should try to find someone who’s got a full capability to do the bookkeeping job for you. But you need to know that you can’t really expect to find someone who can do accounting in your local country because they may not have training in the specific accounting rules that applies in your local market.
In addition to my comment, I have found a blog that’s got some tips on how to hire a great bookkeeper. I hope it helps.
https://www.staff.com/blog/accountant-at-6-dollars-an-hour/