Financials and accounting are just part of being a business owner. However, you go into business to build a better widget, or serve a specific customer niche, or whatever it is, but you go into business specifically so that you can be in business. Most people don’t go into business to be bookkeepers. If you have watched our videos before, you know how much I admire Mr. Tim Ferris for introducing the concept of delegation.
Bookkeeping is one of those things that you should absolutely, under all circumstances, delegate.
Hiring the right bookkeeper
When you’re looking for a bookkeeper, be sure to ask questions like:
- How many clients do you currently work with?
- Do you work with clients in my industry? (it can be helpful if the bookkeeper has dealt with your specific industry before)
- When are 1099’s due? (learn more about that in our article on 1099s).
There are also some theoretical type questions that you would want to ask your bookkeeper:
- How do you work with the CPA (that is, a Certified Public Accountant)?
- Do you normally like to work hand in hand with the CPA? Or, do you like to attempt to prepare a finished QuickBooks file for the CPA to do taxes from?
Why you probably want a separate bookkeeper and accountant (CPA)
If the bookkeeper answers, “I don’t work with the CPA,” or “No, I’ll do the taxes myself,” he or she might not be the right person to work with. As a business owner, you want a team of experts to ensure that each aspect of your business is properly looked after and functioning. Typically a business owners team consists of: an attorney, a CPA, if you’re in involved in real estate, a real estate agent, commercial or residential, a bookkeeper and an insurance agent. Your bookkeeper is an integral part of your team.
Without a good bookkeeper you may be missing deductions, you may be missing areas where you could be taking write-offs to reduce your taxes. Your CPA and your bookkeeper should work hand in hand.
What you should expect from a bookkeeper
There are some cases where you might need a few extra services from your bookkeeper. If you’ve been doing your books yourself, there could be few errors (I mean, unless you’ve got an accounting degree) that the bookkeeper might need to fix. Any good bookkeeper should be able to take a look at your books and let you know where you’re at and if there are corrections that need to be made.
This is something that I would want to see from any bookkeeper going into a client’s office, that is, what kinds of things the bookkeeper is looking at:
- Are they looking at whether your books have been reconciled?
- Are they looking at how many bank accounts and credit cards you have and whether you have the statements for all of those?
We had a case once where a bookkeeper was working on a file and had gone ahead, done all the banking and reconciliations, and all the data entry for one bank account, but never asked the client if there were any other accounts. Client told us that they actually had three accounts, so we had to send the bookkeeper back to do reconciliations on the remaining two. Your bookkeeper is one of your internal confidants for your business. I would highly recommend that you keep a good relationship with your bookkeeper, and definitely speak with some of their references before hiring one.
If you have any questions on what makes a great bookkeeper, don’t hesitate to reach out to us.
