6 Things to Keep in Mind When Hiring a Bookkeeper
Hiring A Bookkeeper
When you make the decision to hire a bookkeeper, It’s important to feel confident that you’ve made the right choice, be it a local in-person bookkeeper or an online service. Knowing what to look for when going through the hiring process could be the difference between success and failure. You want to choose someone who is professional in every respect of the bookkeeping process, and whose style suits your business needs. Let’s take a look at 6 aspects of hiring a bookkeeper that we need to keep in mind.
A good bookkeeper will be detail-oriented and will take the time to get to know the specifics of your business including the products or services you offer, the typical profile of your customers, and the flow of your financial transactions in order to organize your books in a way that is most helpful for your type and scale of business. The structure of every small business is different and a good bookkeeper should be able to understand your structure and format the books accordingly. For instance, If you have a service-based business, like a hair salon or a landscaping company, the number of customers you have come in on a monthly or annual basis, the size of those accounts, and the potential need to keep a running list of accounts receivable or payable (requiring use of the accrual method of accounting) will be a lot different than the same variables in a business that mostly sells physical wares, like a furniture store. If you run a gym that sells memberships and exercise class passes, and also contains a boutique with workout clothes and accessories, you’re trading in both, and it would likely be in your best interest to separate out the type of your transactions to get a an optimal financial snapshot for each area of your business. A good bookkeeper will understand this and be able to organize transactions with your specific business needs in mind.
2. Experience Level
Balancing experience level and expense is probably something you’ll encounter, just as you would for any other new hire. In some cases you don’t necessarily need the most experienced bookkeeper, If your finances are fairly simple, it may make sense to go with someone who demonstrates good knowledge of your industry, and who has certification or other experience in bookkeeping, but who may not have as many years in practice behind them. A candidate who is newer to bookkeeping and is bright, motivated and willing to put in the hours to get more hands-on experience with your bookkeeping needs could be ideal for a new business, or those with budget constraints. If your industry require a very seasoned bookkeeper or someone with very specialized industry knowledge and experience, you may have little choice but to be willing to pay the associated price in order to maintain your books to the highest of industry standards.
3. Software and Tracking Systems
Ask upfront whether a bookkeeper uses software like Quickbooks or Xero. If they don’t, you may want to consider moving on to a different candidate as software systems, online services, and other digital tracking systems is the industry standard, and while you can still keep your books on written ledgers it is often the least desirable option. If you’ve been keeping your books using a particular software for bookkeeping and you like it, ask if the bookkeeper is familiar with this system and how they would continue using this software moving forward. Staying with the same software has obvious benefits like maintaining access to your old data and not having to pay the cost of having the bookkeeper transfer it to their preferred system. Furthermore, if you aren’t sure how long you’ll be using a certain bookkeeper, it doesn’t make sense to do a complete system switch. If you are starting fresh with a new business you may need to do some research on the different software options ahead of time. Here are 6 Things to Know About Online Bookkeeping Services to help you get started. Finally, make sure to ask about the cost of providing reports from your data on a daily, weekly or monthly basis. The cost may be proportional to the amount of time (for example, weekly charges could be ¼ of what monthly charges would be) or the bookkeeper may charge a higher amount for more frequent reports. Running reports consistently will help you make important decisions as a small business owner and understanding the cost of running those reports upfront will help you plan accordingly.
4. Accessibility and Accountability
As a small business owner, you probably know that customer service is key to standing out from the crowd in your industry and attracting and retaining customers. It’s no different when you’re doing the hiring. A good bookkeeper should provide you with multiple ways of contacting them, for both time-sensitive and non-urgent matters as you will need to know that you can rely on being able to contact them when needed. This is also true for needing your bookkeeper to be accessible to your accountant, especially during tax season. So be sure and ask potential bookkeepers about their availability day-in and day-out and during busy seasons like tax season. With your bookkeeper collecting all your daily financial data and your accountant analyzing that data and making sure your taxes are done right, together they can keep your business running smoothly. By picking a bookkeeper who knows how to maintain the right level of communication, you will rest assured knowing that your finances are in good standing. One last point, you should be sure to keep your bookkeeper aware of your business’ key dates: payroll days, tax return deadlines, and any meetings you have on the calendar with your accountant to give your bookkeeper what they need to be able to perform their job effectively and efficiently.
5. Service Specifics
Many bookkeepers offer additional services beyond basic bookkeeping, at an extra cost. The most common service that would be useful to small business owners is handling payroll. If you’d rather have your bookkeeper handle your payroll, ask up front how much they charge for that service on a monthly or annual basis. Be sure to also ask if you’re interested in other specific services, like credit control or debt collection, if you’ll be processing a lot of credit card payments or have concerns about making sure your company gets paid on time, your bookkeeper can also operate the financial side of your account management which could take that burden off of other employees like your salesforce.
6. Consider an Accountant
You have likely picked up on this by now… but bookkeepers are not accountants, and they perform different functions. However, while a bookkeeper cannot also be an accountant, an accountant CAN also be your bookkeeper. They’ll likely charge more than a regular bookkeeper, given their specialized knowledge of the tax code and ability to handle more complex issues. But if your business requires someone to make sure financial data is analyzed correctly so that you can receive the most favorable tax treatment, or if you think you might face an audit at some point or be required to produce large amounts of data for the IRS for any other reason, hiring an accountant to do the books for you might be the best choice when all is said and done.
Hiring a bookkeeper is often the wisest move for a small business owner to ensure that their financial house is in order. Choosing the right bookkeeper can literally save you thousands of dollars and countless hours of heartburn. By utilizing these 6 principles of hiring the right bookkeeper amongst other best hiring practices you will be better prepared to make the right decision for optimal business success.
July 17, 2019
Alyssa specializes in creating content and website copy for law and accounting firms and nonprofit organizations. She has an undergraduate degree in history and a J. D. from Columbia Law School.