Bookkeeping

accounting book with penKeeping accurate records of your income and expenses is an absolute must when you own a business.  This information will be used by both you and your accountant to monitor the financial health of your business, prepare budgets, pay taxes, create strategic plans and obtain financing.  It is imperative that you maintain accurate and timely financial information to help you routinely assess your company’s financial position and cash flow needs.  A bookkeeper can help you accomplish this goal.

Bookkeeping services can come at many different levels.  Minimally, a bookkeeper may initially help you set-up your chart of accounts and bookkeeping system.  On the other end of the spectrum, your bookkeeper’s services may be so extensive that they could be qualified as a temporary Chief Financial Officer.  Oftentimes during the beginning of a start-up business, the bookkeeping is done in-house.  Then as the company grows, the bookkeeping is outsourced.  No matter how much or how little your company relies on the service of a bookkeeper, they are an integral part of your advisory team. 

When choosing a bookkeeper…

Your accountant will probably be able to recommend several reliable bookkeepers with whom they have previously worked and have a good repertoire with.  It is important that you, your accountant and your bookkeeper work closely together as a team to maintain accurate and current financial reporting for your business.  Timely and accurate financial reporting enables you and your accountant to develop strategic plans for your business’ future and provides you, the business owner, with the highest quality of service these advisors can provide.

The process of filing and paying taxes may be simplified if your bookkeeper uses or is familiar with the accounting software your accountant uses to prepare tax returns.  There are several different kinds of bookkeeping programs on the market, with the most popular being QuickBooks.  There is also Peachtree, OWL Basic Bookkeeping, and Microsoft Office Accounting, just to name a few.  When choosing a bookkeeper, you should ask the prospective firm or individual if they are certified in any of the various bookkeeping programs.

When conducting interviews with bookkeepers, you should ask yourself…

  • Do they seem to be honest and trustworthy?
  • Do you get along with this person?
  • Are they knowledgeable?
  • Are they certified in the bookkeeping software of your choice?
  • Do they work as an independent consultant or as part of an accounting or bookkeeping firm?

If you are hiring a part-time bookkeeper it may be because you lack the knowledge, time to do it yourself or you feel your time is better spent in other areas or your business.  You should view a bookkeeper’s work for you as you would any other full-time employee.  You need to be confident the bookkeeper is competent and capable of working efficiently on his or her own with minimal guidance from you.  You need to know they can create accurate and timely financials on a regular basis.  Some characteristics you may want to look for in a bookkeeper are:

  • Do they seem to be detailed oriented?
  • Do they follow through with tasks until completion?
  • Are they timely in their task completions?
  • Are they computer literate?
  • Do they prioritize your work ahead of outside responsibilities?

Make sure to ask them:          

  • How long have you been practicing?
  • Do you have an associates or bachelors degree in accounting?
  • What have you done within the past year to continue your education and keep current on accounting practices?
  • What services do you offer?
  • Do you have a specific bookkeeping software that you or your firm works with?
  • What kinds of clients have you previously worked for or are currently working with?
  • How many of your clients have been or are in my industry?
  • Do you have any references?
  • What is your fee structure?  Is there an hourly rate or monthly retainer?
  • How do you bill your expenses such as travel time?

If you will be performing most of the bookkeeping tasks of your business and your bookkeeper will be reviewing your work for accuracy or providing technical support for the bookkeeping software, you should also consider:

  • How clear are their communication skills?
  • Are they able to train you to utilize the bookkeeping software efficiently?
  • How promptly will they respond to your calls and emails when problems arise?

During your interview make sure they are proficient in the following:

  • Understanding basic accounting and bookkeeping practices and terminology.
  • Understanding bookkeeping practices in your business’ industry.
  • Proper job costing

You should create a very detailed list of the bookkeeping tasks or services you would like a prospective bookkeeper to provide on a daily, monthly and/or annual basis.  After discussing the needs for your business with them, ask for an estimate of how much time it will take to accomplish these tasks and the cost of that time.  Your accountant would probably be willing to review your findings and help you choose a suitable bookkeeper.

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