Who's Watching YOUR Money? 7 Tips for Hiring the Right Bookkeeper
While Im
a strong advocate of hiring virtual assistants, there are two things
that no entrepreneur should ever fully delegate: marketing and bookkeeping.
The marketing and
the bookkeeping of your business can
easily make or break you (just think new Coke and Enron). That said, if bookkeeping is
not your forte, hire someone
to do it
you will save
so much in frustration just be sure to keep your fingers in the books.
If you choose to hire a bookkeeper, keep the following in mind:
1. Get QuickBooks.
For ease of use, I highly recommend using
QuickBooks and hiring a QuickBooks ProAdvisor. QuickBooks ProAdvisors have taken certification exams to insure that they know the system. I have used QuickBooks both for myself and my clients since 1996 and highly recommend it for its ease of use/understanding.
The online version is great in that you can see the latest version of your books at any
time and eliminate the annoyance of emailing files back and forth and wondering
who has the latest version.
2. She must see both the forest AND the trees.
You
want your bookkeeper to be detail-oriented AND to see/understand the big picture. She needs to know what happens consistently every month and update your books without bothering you for items
she should know about.
At the same time, she needs to be astute enough to see the larger
picture and warn you of any impending problems before they happen. If you purchase a piece of equipment, she should know how to properly enter it into your bookkeeping software to avoid problems and therefore save
time and money with your accountant (and the IRS) later on.
3. She must know your industry.
You dont want to have to train your bookkeeper on your industry language, standard industry income or expense categories or other basics. The more up-to-speed she is, the faster she can hit the ground
running and the sooner you will have good data. If she doesnt know your industry however, be sure to give her a rundown of lingo and how you refer to your customers/clients/tenants in order for you to get the most meaningful reports out of the gate.
4. She must provide timely reporting.
In hiring your bookkeeper, insure that you put in a provision for when you want to see monthly financials. The date will depend on when your bank month ends give her a few
days after that date to reconcile your accounts and produce reports. At a minimum, you want to see a profit & loss,
balance sheet and cash flow statement.
Take the time to review the reports so you can spot any irregularities before they blossom into problems. Not sure how to read a cash flow statement? Get a check/electronic funds transfer (eft or auto debit) transaction detail
instead. It will help you see where the cash is going.
5. She must know accounting terms and still speak English.
Your bookkeeper needs to know the difference between assets, liabilities, income, expenses and equity and be able to provide your accountant with the necessary data upon request. At the same time however, if you are not numbers oriented, she also needs to be able to explain the financial statements to you in plain English.
6. She must be trustworthy.
Hiring someone to keep
track of your bookkeeping requires a level of trust between you both. You
need to feel comfortable that she will keep track of your information and maintain your confidentiality. At the same time, if she pays your bills and has access to your bank accounts, you must also trust that she will not abuse that privilege. And make no mistake, it is a privilege to have someone (particularly in a virtual relationship) trust you with
their finances, their checkbook and their business.
Good business sense demands that you protect yourself just in case. I highly recommend that, in addition to a confidentiality agreement, you insure that your bookkeeper is bonded and you get a copy of that bond.
7. She must have great communication skills.
If your bookkeeper will be communicating with your clients and vendors, she must represent your business as you would. Whether virtual or in-house, its critical that your bookkeeper be a positive force that further enhances relationships. The question of money can, at times, be a sensitive matter. You need someone who recognizes that and communicates appropriately.
Always remember these are your books and this is your
business. While you may hire someone to manage the details of tracking your finances, and should do so if this is not one of your strengths, the ultimate responsibility for oversight is yours. Michael E. Gerber of the E-myth series said it best: Delegate, dont abdicate.
Copyright 2006 Sandra P. Martini
Sandra P. Martini