Bookkept Small Business Guide

How to choose the right bookkeeper?

A good bookkeeper is pivotal for the long-term success of any business; therefore, hiring the right bookkeeper is equally critical for the development of your business.

There are many things to consider when you’re seeking out a new bookkeeper, and there is no secret or perfect formula for how to choose a bookkeeper (or any other employee). That being said, there are a few fundamental qualities that every bookkeeper should have if you want them to be a great addition to your company.

As soon as you start a business, you have to deal with numbers. Every business, no matter how small, must keep a record of its every transaction. That includes sales, expenses, salary payments – in fact, every movement of money into and out of your business.

Although it’s possible to do this yourself, most entrepreneurs aren’t trained in bookkeeping. So it’s common for businesses to outsource this everyday work.

In this guide, we’ll explain why hiring a bookkeeper is a great idea or even an essential part of doing business. Then we’ll look at how you can hire the right bookkeeper for your business.

Whether you’re just starting your business or you’re fine-tuning your financial strategies, a professional bookkeeper can be a tremendous help when it comes to balancing your daily expenses, earnings and managing your invoices. By handing these jobs over to a specialist, you can lower your risk of error and instead use those extra hours for other pursuits. But where do you find a bookkeeper, and what do you need to know in order to choose? Read on to discover how successful businesses locate the best bookkeeping services.

 

Things to Keep in Mind

Trust & Security

Bookkeepers have access to much of the most critical personal/private information regarding a company. Considering bookkeepers maintain all of the essential financial records of a company, they’re frequently a pivotal individual for making sure there are no issues with invoicing, payroll, and taxes.

Your bookkeeper is someone that you need to be able to trust wholeheartedly. Before hiring a bookkeeper (or a bookkeeping service), ask them all the questions you can think of regarding their methods and processes for safeguarding your financial information. If you don’t feel that you can 100% rely on an individual to be accurate and transparent, you need to find a different bookkeeper.

 

Certification

You should always hire a fully licensed and certified bookkeeper. In an attempt to save money, some businesses feel tempted to hire unlicensed individuals to maintain their books. Hiring uncertified bookkeepers can be a shortsighted mistake because even though unlicensed bookkeepers might save you money in the short-term, they are more likely to make errors and cost you money in the long-run.

 

Excellent Communicator

A bookkeeper is a person you rely on to keep track of your numbers; therefore, this is an individual that you’re going to be in communication with regularly. Some bookkeepers might be excellent at keeping track of the numbers, but if they fail to communicate with you, they can still be a detriment to the overall well-being of your company. Part of being an excellent communicator is being a fantastic listener, so your bookkeeper should be attentive and interested when you’re discussing the details of your company. Ultimately, you and your bookkeeper should have a harmonious relationship that allows for information to routinely and accurately flow between the two of you.

 

Organised

A bookkeeper is a financial record keeper, and they need to maintain a filing system that reflects the importance of their job. There should be an immediate answer to most financial questions that you might have for your bookkeeper. If a bookkeeper organises well, there should never be an issue with answering basic questions regarding company finances and expenditures. A bookkeeper that appears disorganised, or is inconsistent in how they file important company paperwork, should not be trusted to maintain the financial records of an entire business.

When seeking out a new bookkeeper, make sure your company selects an individual that has a clear and concise system for keeping track of paperwork. Remember, paperwork filed away today might still need to be looked at 5 or even ten years from now.

 

Shares Your Vision

When most people think of bookkeepers, they imagine an individual immersed in the details, too busy to look up from their various papers and calculators, and someone who is far too busy to worry about the bigger picture associated with running a business. This stereotype should be far from the truth; yes, a bookkeeper should have incredible attention to detail that allows them to keep track of various small numbers. However, a bookkeeper should have an understanding of your industry and should share the greater vision of the company that you’re trying to build. Considering bookkeepers are such a critical part of the day-to-day finances of the company, they’re also a team member that needs to be in tune with the more significant goals of the company.

 

Hiring Internally

While hiring an employee to take over bookkeeping may seem like a good way to keep control of your finances and the people managing them, this method often falls short in execution. For businesses without expertise in managing bookkeeping procedures, accounting software or financial analysis, managing bookkeeping internally can be a recipe for disaster.

 

Additionally, in many situations, internal bookkeeping staff can be subject to a myriad of information security, fraud or even simple errors or mistakes in financial entries. From repurposing office admins to mismanaging employees, having an internal bookkeeper requires a lot of oversight.

 

Hiring Freelancer or Part-Time Bookkeepers for Bookkeeping Tasks

What kind of education and experience does a freelancer have? The answer varies greatly from one worker to the next. You want to ensure your bookkeeper has professional education in the field, along with relevant experience and a good track record. Certification, licensing and insurance should all be investigated. If a freelancer makes a mistake while working for your business and doesn’t have liability protection, you’ll likely be left holding the bag. In addition, if your freelancer is working off-site, say from a home office, you’ll have to find a way to provide adequate oversight in order to prevent account mismanagement and serious mistakes.

Competent freelancers exist, but you’ll have to be diligent to find the right one for your business. Your bookkeeper needs to be able to balance your books and provide insight both on problems you’re experiencing now, and those you may come across in the future. To be effective, they’ll also need to use resources that are compatible with the software and payment tools you already have in place.

 

Hiring CPAs

Hiring a CPA to do a bookkeeper’s job is usually a serious waste of resources. Not only that, but accountants rarely enjoy the work. Instead, consider hiring a CPA to advise you on financial matters requiring more expertise, like filing taxes or managing investment funds. CPAs regularly work with bookkeeping services and may be able to recommend professionals who can fill a daily accounting role for your business at a much lower price.

 

Hiring Professional Bookkeeping Services

Finally, there are bookkeeping service companies that manage daily accounts for multiple businesses. They often employ CPAs for management roles to provide adequate oversight and counsel for a bookkeeper who runs into a problem. Because they work with a variety of clients, these services often have access to a wider range of tools, and because they employ so many people, they have a better chance of having the experience needed by your business. Additionally, leveraging connections to industry experts and accounting technology companies can provide extra benefits to businesses.

 

Hire for confidence

When looking for a bookkeeper, you want someone who is confident. A good communicator is critical for a job like this. With Maximum Business Solutions, you’ll get more than a bookkeeper; you’ll gain a valuable asset to your organisation who makes a real contribution.

Communication skills are vital in every position, particularly for bookkeepers, as they play a critical role within your business’ finances.

 

Hire for understanding

One requirement you should expect from your bookkeeper is that they gain a firm understanding of your business, its current financial situation, and your short- and long-term goals.

A bookkeeper who exhibits little understanding of your business or how you do things is demonstrating a lack of commitment to you and your team. Red flag!

 

Hire for skill

As a business owner, you’re probably looking for a bookkeeper because you simply don’t have the time nor the skill to manage the role anymore. Perhaps when your business was young, you made the time to manage yourself. But now, with a growing business and a growing team, you simply can’t find the time. Your choices?

 

  • Squeeze it in when you can, opening up an opportunity for errors, inaccuracy, and omissions
  • Choose a qualified bookkeeper dedicated to the correct and accurate processing of your books.

 

We shouldn’t have to tell you which is the smart choice! Engaging the help of a professional bookkeeper really does make all the difference.

Cash Flow

 

Hire for growth

No business owner wants to remain stagnant, and great businesses push themselves to grow and succeed continually.

A reliable, committed bookkeeper is key to the financial aspect of success. Find a bookkeeper who is passionate about your business, driven to perform their best, meets deadlines, and continually provides business insight. If you’ve found that, then you’re onto a real winner.

 

Ask questions

A great bookkeeper asks relevant questions. He or she will also share ideas with the business owner regarding financial-planning strategies, ways of increasing revenue, cash flow, budgeting and many other cost-saving strategies they can come up with to increase business performance and growth. With a good understanding of the business and financial position, they can help grow the business while keeping costs to a minimum.

How do you know if your bookkeeper is a keeper? Most importantly, they should always be upskilling, training and certified.

Bookkeepers who are registered as BAS Agents are required by the Tax Practitioners Board to have skills, qualifications and learnings around all bookkeeping areas including GST and BAS requirements. They are also expected to have industry experience of at least two years, as well as agree to an established code of conduct. In order to stay current, they must re-certify every three years.

 

Three reasons why you need a bookkeeper

If you’re just starting out in business, you might think you don’t need someone to look after the books. Perhaps you feel that it’s enough to let your accountant sort out the numbers once a quarter or once a year. But there are good reasons for hiring a bookkeeper. Here are three of them:

 

They save you time

Unless you already know a lot about bookkeeping, it’s unwise to take on this work yourself. Processing receipts, expenses and payments is only part of the work. They know how to assign expenses to particular clients. They’ll take all the numbers, enter them into your accounting software, and make sense of them. A good bookkeeper knows how transactions should be treated to provide useful business reports. It’s a skilled job, and your bookkeeper will do it much more efficiently than you can.

 

They understand your business

Because they deal with the day-to-day accounts, bookkeepers have a deep insight into your company’s finances. By sharing this insight with you, they can help you work out where your business should be going. They can flag any issues in time for you to do something about them. A good bookkeeper watches over your finances and helps you steer clear of trouble.

 

They help manage your cash flow

Accountants provide a valuable service, particularly when it comes to strategic advice, annual returns, and tax issues. But they don’t usually see your accounts every day. A good bookkeeper will keep a close eye on your accounts regularly. This will help keep your cash flow under control, which is vital for business growth.

 

Understand what you need

Hiring a bookkeeper is like hiring any other professional. First, you need to understand your own requirements. Only then can you identify people who will suit the role. Here are some questions to think about:

 

What type of business do you run?

For example, manufacturing businesses have different bookkeeping requirements for service or retail companies.

How many transactions do you make on a daily, weekly or monthly basis?

This will help determine how much bookkeeping time will be required.

 

Which accounting software do you use?

It helps if you’re using online accounting software. Then your bookkeeper can share data securely with you at any time.

 

Do you require credit control, payroll services or debt collection services to help you get paid faster?

Some bookkeeping companies can handle chasing up the money customers owe you, at a cost.

 

What are your key dates?

Your key dates will include payroll days, tax return deadlines and scheduled meetings with your accountant. You’ll want your accounts to be accurate and up to date before each of these dates. A key date also revolves around business performance reports. Ask the bookkeeper if they review reports every month to see how the business is performing. One example is a timely and accurate Profit and Loss report.

 

Choose the right person

Talk to as many people or firms as you need to. Interview them twice if necessary, and be sure to check their references and qualifications. It’s also important to think about personality and culture fit. Your chosen bookkeeper will be communicating a lot with you and your staff, even if they aren’t employed full-time. It pays to hire someone who works well in your environment. Trust your instincts here, and hire someone friendly, helpful, and above all, keen.

 

Write a Better Ending

In summary, you should put some time and think about who you choose to be your bookkeeper, and you should not hire anyone that lacks the qualities we’ve mentioned above. Bookkeepers have access to all of your most important and sensitive financial records; therefore, it’s essential that your bookkeeper be somebody you can rely on to be timely, courteous, and trustworthy. While many companies are tempted to hire non certified bookkeepers so that they may save money in the short-term, you will likely avoid many costly blunders by assuring that you hire a fully-licensed bookkeeper. Finally, remember that a bookkeeper is a critical member of your business team; so they should be someone that you can easily communicate with, and a professional that shares the greater vision and goals of the company.

Bookkeepers create order out of chaos. They take all the numbers, receipts, bills and other accounts data that flows through your business. They funnel it all into your accounting software – into the right reports and the right account.

They turn all this data into meaningful financial information. It will all be in the correct place, properly filed and organised. This can be used to give you an immediate view of the health of your business.

A good bookkeeping partner will be with you every step of the way as your business grows. So it pays to take your time and make sure you hire the right one.

Hiring a bookkeeping service to manage your accounting needs can help you identify potential risks and opportunities, in addition to simply ensuring the integrity of your financial data. Even the smallest business owner can often benefit from their help and advice. Unfortunately, not every solution is profitable once put into practice. Protect your business by taking the time to find and hire the right bookkeeping partners.

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