It’s finally time. You’ve decided it’s time to hire a bookkeeper. Now that the decision is made, now is the time to suss out the details – namely how to find, interview and determine which bookkeeper is right for your business.
Here are five tips to help you find your best bookkeeping fit.
Hire a Bookkeeper that Knows Your Industry.
This seems like a no-brainer, right? You’d be surprised at how often businesses will hire a bookkeeper without experience in their industry. They see a bookkeeper has 20 years of experience (which is great!) and think that the experience will cover their business adequately. But this is a mistake.
Why does industry experience matter?
If a bookkeeper hasn’t worked in your particular industry, they have a learning curve you will pay for. Most bookkeeping arrangements are based on hourly billing. That means more hours pile up expense-wise as the bookkeeper researches and undergoes training for your industry. You’ll see that on your bottom line. And if they are billing you a flat rate, you’ll undoubtedly suffer in areas such as efficiency as they acquaint themselves with new concepts.
Worse, what if the bookkeeper makes a mistake because he or she isn’t familiar with your industry? You can face sizeable repercussions. Take, for example, a law firm. If a bookkeeper doesn’t understand trust accounting and makes an error, it can lead to a loss of client trust, fines or even criminal charges. If a bookkeeper hasn’t handled billing for reimbursable expenses, you might not recoup them.
Don’t Put Too Much Emphasis on an Accounting Degree.
Yes, I wrote that. Now let me explain. While an accounting degree is admirable, a business administration degree might be more applicable to a small business. Most accounting degree programs focus on principles for larger corporations. They don’t have a focus on the small business environment.
Generally, if you have someone with a business degree they have a greater understanding of how to run a business than (for example) tracking an asset. In short, someone who is more entrepreneurial themselves will probably understand the high-growth, quickly changing demands of a small business.
Ask for Three References and Be Specific About Which References You Want.
This sounds like a standard part of the vetting process, right? You gather three references and speak to each one about their experience with the bookkeeper. Often, these references are happy clients. No problem there – it’s good to know your potential bookkeeper has happy clients.
But you must ask for a reference from a CPA or an enrolled agent. A professional of this magnitude can examine a bookkeeper’s work from an accounting perspective and let you know if they truly know what they are doing.
Sadly, a small business owner may not know if their books are a mess. They could be satisfied because invoices are sent out and bills are paid on time. A CPA, though, can look at the books and detect right away if there are anomalies or dysfunction.
Conversely (and for the same reason), go to a CPA or tax accountant if you want a referral for a bookkeeper.
Ask Situational Interview Questions.
Did you ever go on an interview and hear a question start like this: “Tell me about a time when … “
Those types of questions serve a purpose. They are formulated to determine how a person “ticks” and what their prevailing traits are. When you are interviewing prospective bookkeepers, create a question based on your prior experience with other bookkeepers or employees. For example: “Tell me about a time you were going to be late for work. What did you do?” Or “Tell me about a time when a client asked you to do post a transaction that wasn’t correct from an accounting perspective. What happened and how did you handle it?”
You’ll learn a lot about the characteristics of the bookkeeper and this will help you make a more informed decision.
Don’t Insist on an In-House Bookkeeper.
Allow yourself to be open to working remotely with a bookkeeper. This will open up multiple opportunities in terms of pricing, services and talent.
Consider contract bookkeeping with a professional firm that works remotely with you. Technology has evolved to the point where virtual bookkeeping is seamless. You’ll still undergo the usual vetting process – that’s important. But you’ll be able to collaborate on an entirely different level with different results when you open up the possibility of partnering with a virtual bookkeeper.
Those are my five tips to help you find a good bookkeeper for your business. Integrate these ideas into your vetting process and you’ll find the ideal bookkeeping partner.