Tips on How to Hire the Right Bookkeeper


Tips on How to Hire the Right Bookkeeper
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What to look for when you’re hiring a bookkeeper. The first tip is find someone with good experience. Sometimes that’s hard to do. In the workplace today there seems to be fewer and fewer bookkeepers available to be hired. When you’re interviewing you want to find someone with good experience. How experienced of a person? I would say as experienced as you can afford. The better that bookkeeper is, the better it will be for you and your business. “Buy all the bookkeeper that you can afford.”

The second is, when you’re looking at that experience that they have, remember experience as a clerk is not the same as experience as a general charge bookkeeper. In your business you may be looking for someone to handle, in your small business, someone to handle all of the bookkeeping functions within that business. Which means you need someone we call, in general, charge bookkeeper, someone who’s familiar not only with accounts payable, accounts receivable, dealing with payroll issues, and sales taxes issues, and general journal entries, and so forth. You want that overall experience.

Sometimes if you have multiple people taking care of your accounting in your business, then maybe you would hire a payroll clerk, or an accounts payable clerk. If you’re looking for an overall bookkeeper make sure they’ve got experience in that, because someone who’s an account payable clerk would not necessarily make a very good choice as overall bookkeeper. Lots of times, people are trying to hire someone to be an office manager/bookkeeper, and that’s fine, but make sure they’ve good bookkeeper skills. Look for that experience, and the better they are, the better the person that you can afford, the less oversights you’re going to have to provide.

If they really don’t get it, and if they’re really lightweight, then you’re going to spend a lot of time overseeing what they do, or you’re going to be hiring a CPA from the outside to take a look at what they’re doing. It’s going to take them quite a bit of time to be teaching them, training them, getting them up to speed, correcting their errors, and fixing things. Do yourself a favor and buy all the bookkeeper that you can afford, that’s the first tip.

Second tip is technology. Technology is part of our life today. We want to make sure the bookkeeper we hire is very comfortable with our accounting system. Many businesses use CloudBooks, which is a great program to use to track your business, so make sure they’ve got familiarity with that. Not only with that software, but with using the Cloud. A lot of us store a lot of our information online. We put our backups online of our data. We maybe scan and hang onto our receipts in a paperless fashion, and we may store that in the Cloud too.

Whether you put it in the Cloud, or you’ve got servers that you back stuff up on, you want to make sure that your bookkeeper’s comfortable with technology that you use. A lot of our banking and customer relationships are done online now, also. If they’re not comfortable with technology they’re probably not going to fit the bill for what you need done.

Third tip is thinking about data entry and reporting. Data entry talks about their ability to get the information that you’re providing them, or that your customers and your vendors are providing them into your accounting system. They need to be good at that. They need to do it on a timely basis, whether that’s daily, or weekly, or monthly. Some people will hire a bookkeeper that’s only going to work with their information once a month, or once a week, or every day, depending on the size of your business.

You want to make sure this person is not getting behind. That they’re timely, that information is in there, so that once that month is over, you can pull up financial statements. From a reporting perspective you need good quality financial statements, and they need to be able to get that information in there on a timely basis. Pull up those financial statements and take a look at them. That bookkeeper has to be good enough to be able to look at those financial statements and see if something’s out of whack, somethings doesn’t make sense, something’s not right. Then they can make the correction.

Again, if you couldn’t afford a really high level bookkeeper and you had go with someone with very little experience, then it’s going to be either you, or that outside CPA, coming in and taking a look at it. Finding the mistakes and recommending the changes, and corrections. You can manage your business better when you’ve got good information, when you’ve got good financial statements to work from you can do better projections of the future. You can plan better for your business, and it all around makes a lot of sense to make sure every is done on a timely basis, and you’ve got the reports you need to do that.

Speaking of that, we think about taxes. In order to do proper tax planning we need information that’s in the accounting system on a timely basis. I sit down with my customers, the people that I work with, at least sometime during the month of November and December to try and decide if we’re going to make some adjustments, changes. How we’re going to tie out owner compensation at the end of the year, and so forth. We can’t do that if there’s not timely information in there that’s accurate that we can work from, garbage in, garbage out. If the information’s not very good we can’t do good planning.

Then it comes to actually doing tax returns. If we’re dealing with income tax returns, I’m sure that you would like to see excellent information there, so that we can do a good job of squeezing that tax liability down, and maximizing the amount that you get to keep. Not only that, there’s other types of taxes that have to be filed. Payroll tax returns, sales tax returns, personal property tax returns, you’ve got a lot of stuff going on there, and you want to make sure that you’ve got good information.

That bookkeeper has to be somewhat conversant with the world of taxes. They need to understand what you need to be able to provide your CPA. They need to be good at doing those payroll tax returns, and not causing errors that result in penalties that cost you more money. That they can do those sales tax returns correctly, also, personal property returns, and so forth. That’s all important. They need to be conversant with taxes.

Last, from a cash flow management perspective, bottom line what’s the important thing coming from the business is cash flow. You need to understand your cash flow. It’s no fun to get to a point during the month when you’ve a payroll that’s got to go out, and all of sudden you find out, oh my goodness, we don’t have enough cash here to cover payroll for this particular cycle. Or accounts payable are getting behind; we’re not getting our bills paid on time. Or we’ve got customers who haven’t paid us for 60 days, or 90 days, and the agreement was that they pay within 30 days.

A good bookkeeper watching all of those things, and keeping an eye on it for you, and advising you of when there’s an issue. Taking the bull by the horns, and following up with your customers, and finding out why they haven’t got the payment. Making sure that they’re doing everything they can to see that happens. Making sure that your bills aren’t getting behind, that you’re aware of what the issue are, so that you can manage your business well. Cash flow is really important.

It’s important for your relationship with your bank. Most businesses have a line of credit with their bank. You don’t want to keep drawing on that line of credit, and end up with it being maxed out, and you have no flexibility when you need it. A good bookkeeper will help you to make sure that not only in your cash flow management, they’re also managing your credit. Making sure that they’re watching those lines of credit, so you know what you need, when you need it.

A good bookkeeper, again, is going to be someone that’s got the experience to the job, is comfortable with technology. They’re timely in doing their data entry. They know whether their reporting is right or not. They’re giving you good financial information, no garbage in, garbage out. They’re giving you quality information so that you and they can manage your tax situation, your cash flow, and your banking relationships with requirement to your credit. No surprises, you don’t need any surprises. You want to make sure these things are done, so you can focus on growing your business, managing your business, and being profitable for the long run.