How to Hire a Bookkeeper

For more than 30 years, I ran a successful business helping self-employed small business owners keep their records. It came about because when I started my accounting practice, I found that a large percentage of my new clients did not understand how to keep good financial records, and many could not afford to hire a bookkeeper.

So I developed an easy system for them to use. It was a win-win because they could keep the accounting records they needed to run their business better, and I could add value to their business rather than getting stuck with being their bookkeeper.

We ended up selling that system in Australia, the USA, Canada, the UK… even Fiji because self-employed business owners worldwide had the same symptoms.

Despite my success in developing and selling a DIY bookkeeping system, I also believe that a quality bookkeeper will benefit most businesses.

Now I said ‘quality’ bookkeeper. A family member recently started her own business and immediately hired a bookkeeper because she realized she could earn more money by hiring someone to do that task while she got focused on marketing.

The issue was that she hired someone who was not as competent as they appeared, but she was unaware of this until I examined her books.

So to complete this series on ‘Essential Finance Skills for Small Business Owners’, we explore how to hire a bookkeeper that will benefit your business.

What is Bookkeeping, and Why Do You Need a Bookkeeper?

‘Bookkeeping’ comes under the business pillar of Finance and Administration. It is an essential requirement that if you own a business, you must keep good records.

The government requires you to keep good records to pay taxes and comply with other regulations. But I would argue that the more important reason is that you have chosen to put your life and probably most of what you own on the line to run your own business.

38% of business start-ups that close do so because they run out of money. That is why you must keep good records and the inherent reason for hiring a bookkeeper.

Let’s drill down a little further.

1. As I alluded to earlier, you need to always have this question in mind: “What is the best thing I can do right now to make my business successful?” Unless you run an accounting or bookkeeping practice, it is probably not doing the books.
2. The statistic above about running out of money can have various causes, such as poor sales. Still, in my experience, it can also come from not sending out invoices promptly, not following up customers with outstanding bills and too much tied up in inventory. But, again, a bookkeeper can keep this from becoming a noose around your neck.
3. As a business owner, you don’t want the government on your back. Tax and other government compliance obligations can be easily neglected with other business pressures. A quality bookkeeper can ensure you keep up to date with these responsibilities.

Bear in mind that, more often than not, a bookkeeper is not an accountant. Consequently, you will still need an accountant who understands the intricacies of the tax code and can provide additional analysis to assist you. However, good records will make your accountant’s job easier and minimize the higher costs of a professional.

The Job Description

Let’s take a closer look at the key responsibilities of a bookkeeper.

• Recording transactions: Bookkeepers are responsible for recording all financial transactions, including cash transactions and money going in and out of your bank accounts.
• Managing Accounts Receivable (Debtors) and Accounts Payable (Creditors): This involves issuing invoices, collecting payments, following up on outstanding accounts, receiving and scheduling bills for payment and then making the payment.
• Reconciling Accounts: This means checking that the financial records match its bank statements, and an indicator that the records are up-to-date and accurate.
• Generating Financial Reports: Bookkeepers generate financial reports, such as profit and loss statements, balance sheets and cash flow statements, to keep the owners aware of the company’s performance.
• Managing Payroll: When a business has employees, managing the payroll is an important task. This includes calculating employee wages and deductions, issuing paychecks, and meeting tax requirements.

Bookkeeper Qualities: What to Look For

• Detail-Oriented: Your records must be accurate, so bookkeepers must pay attention to detail.
• Organized: They need to be organized and ensure deadlines are met.
• Tech-savvy: Nowadays, a bookkeeper must understand how to use your preferred software as it will simplify their activities and maximize their efficiency.
• Knowledgeable: Your bookkeeper needs to know what they are doing as mistakes can be hard to track and costly to the business.
• Trustworthy: Your bookkeeper will know everything about your finances, so finding someone you can trust is paramount.

Where to Find the Right Bookkeeper

The first step in engaging a bookkeeper is determining how much work you have for them. This will depend on the size of your business and the average number of monthly transactions. Next, if you or a family member is currently doing the task, how long are you taking, and what else needs to be added? This will then help you decide whether you need a full-time person, a part-timer with a set number of hours per week, or a freelancer.

That decision will influence your options for finding someone for the role. Here are some of the best ways to find the right bookkeeper for your business.

• Put out feelers to people you know and ask for suggestions. Ask your accountant. Explain what you are looking for and, if they suggest someone, ask for feedback about that person.
• Job sites: Advertise on job sites such as the ‘American Institute of Professional Bookkeepers’, Craigslist, Indeed, LinkedIn or even Instagram. Reed and Monster are popular job boards in the UK, and seek.com.au in Australia.
• Freelancer sites: Upwork is a popular platform for hiring freelancers. You can post a job that candidates can respond to, or review the profiles already on the site and then send them an offer.
• Quickbooks has a list of certified bookkeepers who work remotely and communicate with you using video. This can give you some confidence that they are proficient with your software if you use Quickbooks.

The Hiring Process

You want the best chance at choosing the right person. Once you have created a shortlist, you need to conduct interviews and get references that you check.

Prepare a list of questions to ask them. You want to ascertain the following:

• their level of bookkeeping experience,
• how they organize themselves and ensure tasks are done on time,
• their experience with software programs and particularly your program of choice,
• how they deal with challenges,
• whether they can be trusted, and
• whether they fit your culture.

You need to get and check references.

• Ask for references. These should be people they have worked with and can vouch for their skills and work ethic.
• Contact the referees and ask open-ended questions, such as “Can you tell me more about what it was like to work with [candidate’s name]?” Also, ask whether they would employ the person again if given the opportunity.
• Cross-check with other referees and try to find others they have worked with who are not listed as referees.
• Check their social media, as this can reveal a lot about a person.

Conclusion

Hiring a bookkeeper can add value to your business. So, rather than being an expense, it is an investment in your future business success.

Except for the smallest business, having a bookkeeper is a must. If you know little about “numbers in business“, you need someone to take care of this vital aspect of the company.

On the other hand, if you are “numbers-savvy”, great. However, you will undoubtedly find it to be a good return on investment to hire a bookkeeper so you can spend your valuable time on other parts of your business.

This is the final article in this month’s series on essentail small business finance skills. Other articles in this series include:

The 3 Financial Statements Small Business Owners Must Understand
Analyze Financial Statements: Know Your Numbers
Understanding and Managing Small Business Cash Flow