Some business owners hire a bookkeeper because they loathe even the thought of diving into financial waters. Their strengths are “front of the house” sales and marketing and not “back of the house” accounting and finance.
While it is smart to outsource what you know you won’t do and thus make sure that what must be done will be done, ignorance of business financial management is unwise. You may hate it, but little by little you must learn to understand those docs and interpret what they reveal about how to effectively manage your business.
Another practical way to keep tabs on business finances (and make sure that your bookkeeper is honest) is to do a monthly bank reconciliation. Does the record of deposits and withdrawals make sense to you? Are the signatures on checks and withdrawal slips correct and authorized? Some businesses hire a separate bookkeeper to perform this function, so that an unbiased pair of eyes can scrutinize the financials and will be unafraid to question anything that looks questionable.
That said, an expert bookkeeper will save you money and aggravation, keep you out of tax and legal trouble and contribute to the profitability of your business. It is imperative that this person is chosen carefully. A dose of good luck is also very helpful! Here is what you can do to find the best bookkeeper for your business:
- Learn the types of businesses that he/she has worked with. It is useful to hire a bookkeeper who has worked with clients in your industry (but not direct competitors) or with clients of a similar profile (e.g. Freelancers). An understanding of expectations and common practices, typical problems and good solutions will then be brought to the table.
- Ask about your candidate’s education, certifications and professional society memberships. Education and associations reflect the level of professionalism and priority that the candidate places on his/her career. This quality will likely be demonstrated in work done for clients. See also the candidate’s web site and/or LinkedIn page.
- Inquire about the candidate’s employment history prior to going into business independently. Previous employment in corporate finance is a big plus. Especially if this person will take charge of your books, you’ll want someone who knows how to analyze the financials and make smart recommendations. You want more than a data entry clerk.
- Tell the prospective bookkeeper what you need managed. Do you need payroll and payroll tax services, handling of accounts payable and receivable, financial statements and tax prep for the accountant (data into QuickBooks), or complete management of your books?
- Confirm the fee schedule. Depending on your location and the services requested, expect to pay $50-$100/hour. The more services you need, the more per hour you will pay.
- Find out your candidate’s availability. Many bookkeepers have a full or part time job, or a second business. Make sure your candidate can be there when needed.
- Ask for references and follow up.
Best of luck and thanks for reading,