Bookkeeper Madness

Does Your Bookkeeper Really Know What They Are Doing?

There’s no faster way to kill a business than to mishandle its finances. That’s why it’s surprising how often small business owners hand their books over to a bookkeeper and simply assume everything will be OK. There are ways this assumption can really hurt your business. Plus, there’s an easy remedy.

Bookkeeper Madness Mistake #1 – Hiring a bookkeeper with less QuickBooks skills than advertised:

Small businesses often look for bookkeepers with QuickBooks skills since QuickBooks is the most popular small business accounting software. But a bookkeeper can easily stretch the truth about her exact level of experience during the interview process.

If you’re not a QuickBooks expert yourself, how can you tell if the person you hired really knows the software’s advanced functions or whether she is getting by on the basics? Do you hire her and find out 3 months down the road — after you have invested a ton of time and resources?

Maybe your new in-house bookkeeper believes she can “learn on the job.” If that’s the case, as your company’s bookkeeping needs grow, there’s a good chance your bookkeeper will find herself in over her head.

And what about cost? Perhaps your bookkeeper’s rate seemed reasonable upon hire, but now you are paying for her training while simultaneously taking on the risk of mistakes? Or simply not making the best use of your accounting software or your data?

Bookkeeper Madness Mistake #2 – Thinking QuickBooks Skills are the Only Skills You Need:

Let’s assume for a moment that the data going into your QuickBooks file is correct and your bookkeeper is reasonably skilled at using the software. Ask yourself these questions:

• Is your business using that information to make better decisions?
• Does your bookkeeper review your Profit & Loss Statement, Balance Sheet, and Cash Flow statement with you regularly?
• Can your bookkeeper develop custom reports that capture nuances particular to your business?
• Does your bookkeeper help you draw business insights from your numbers or simply spend a lot of time tallying up revenue & expenses so you can prepare tax filings?

What’s the remedy to bookkeeper madness?

First, when interviewing for bookkeepers, always check certifications. Intuit (the company that publishes QuickBooks) offers various levels of certification. It’s one thing for a prospective bookkeeper to tell you she knows QuickBooks and quite another to be certified by QuickBooks.

Second, ask tough questions about how the bookkeeper can help you make business decisions. In the past, what type of business reporting has he or she provided to clients or employers, and what are some examples of how this reporting has helped lead to better strategic decisions?

Third, consider hiring a pre-qualified bookkeeping service that can tailor their functions to meet your small business’s needs. There is no training required, no benefit costs, no time wasted hiring and firing, and most importantly, things are done right the first time.

(Special thanks to Ed Becker, licensed CPA in NY and MA for this article)