Selecting the right bookkeeper is critical for your business and for many reasons. But don’t take my word for it. For this blog I have a guest writer, Business Coach and multi-published author Donna Stone, sharing her views and insight.
It is with pleasure I write this blog for Accurate Balance. Having previously owned bookkeeping businesses myself and over a dozen years of business coaching, I know for a fact that the bookkeeping does affect the bottom line. When working with a client I will ascertain what they are doing regarding bookkeeping and whether it’s looking to be on track. If not – then I will encourage that person to use the services of a professional bookkeeper, like Accurate Balance Bookkeeping, in order to ensure that bookkeeping is not what takes down that client.
So, what do you need to look for when selecting a quality bookkeeper who will have a very positive effect on your business?
It’s important to get a qualified and professional bookkeeper. This is to ensure you have someone who actually knows what they are doing. Almost anyone can have a go at being a bookkeeper, but reality is that it’s harder than it looks. The person needs to have a solid understanding of GST, tax rules and general accounting principles. I knew of a person years ago who had a couple of lessons with a bookkeeping trainer, barely managed her own bookkeeper and then set up as a bookkeeping service. I just cringed. There are still some ‘cowboys’ out there so be sure to ask about professional qualifications. Have they attained accounting or financial services qualifications?
Licensed & Legal
Whilst anyone coding transactions or providing GST advice needs to be fully licensed, there are still many bookkeepers out there who are not licensed and legal. Whilst they run the gauntlet of being fined, you (the user) run the risk of suffering the consequence of their mistakes. If your bookkeeper is not licensed and makes a mistake, then the consequence falls back on you. Even if you can prove they did the work, the ATO charter does not allow for the blame to be shifted to them. A professional bookkeeper like Shirley and Accurate Balance Bookkeeping doesn’t just pay a fee and gets a license. There are many steps involved; including proving experience, updating skills, having insurance and being a member of a professional body. All these requirements raise the standard of the industry giving the end-user a better service. So ask your prospective bookkeeper if they are licensed under the Tax Practitioner Board.
A professional keeps up to date
Rules and regulations are constantly changing; having a professional bookkeeper means that person has a few different clients, is legally required to update their skills and through their professional membership is kept updated around pertinent changes. Only recently single touch payroll became compulsory, but in talking to my own clients, I know many of them barely know what this is, let alone if they are compliant. When you use a professional, they not only know what’s required but know how to do it – so when they do it – they do it well and quickly.
References & Reviews
Don’t be afraid to check out your prospective bookkeeper and see what s/he is like. Do your due diligence and look them up online. Have they got reviews and testimonials on their website or via their GMB (Google My Business) profile? It’s not a popularity contest, however, if they have lots of negative online comments, then I would beware.
Interview your bookkeeper
Most people don’t know what to ask, so invariably the only thing they ask is ‘how much?’ If you are using a specific accounting program, how long have they been using that? Are they a Certified Consultant? That isn’t just a title, it means they have proved to Xero (or MYOB or Quicken etc) that they know that program. It also means they have access to that company for support. On the note of pricing, don’t just take the cheapest price. What you want to attain is value. The person who only does half the job, takes a long time or has a tendency for error might not represent value.
What is their attitude?
As part of the interview process, finding out their attitude on things is very important. If you want to ‘fly under the radar’ and avoid an ATO audit, then it’s important you have a bookkeeper who does things ‘by the books’ (pun intended :). Does your professional bookkeeper ask that you furnish all invoices? Do they perform the bookkeeping no less frequently than monthly? Do they provide guidance to clients around ATO rules and regs – not as an accountant, but as to proper process? Does your potential bookkeeper take pride in his/her work? Or alternatively, are they more prone to cut corners, be relaxed and let the problem be yours? Have some important questions ready for your prospective bookkeeper and see whether they will be a good fit for you and your business.
Consider having your bookkeeping separate from accounting
Whilst many accounting firms are encouraging this, I’m not usually a huge fan of your accountant and your bookkeeper being the same company or person. These are two different services and having two different businesses (or individuals) maintains the status quo. If your bookkeeper works for your accountant (or vice versa) they are not going to alert you of any anomalies as their loyalty is to that joint firm?
Timely & Accurate
As a coach, I am always saying to my clients that they need to review reports weekly or monthly; which you cannot do if the bookkeeping is months behind. If the figures are not accurate, then you cannot make informed decisions. How can you effectively debt collect if your receipting is not up to date? One particular client was about to purchase new equipment assuming his profit was quite high. When we dug deeper, we discovered a large capital injection had been coded as income (with GST) so in fact, he was not as profitable as he thought. Important decisions require accuracy.
They have a team (and a process)
Having a bookkeeping service which has more than one person has many advantages, particularly if that bookkeeping practice has processes in place. Firstly, although you are allocated one person (but double-check that is what they do) it means that if your person is sick or leaves or goes on holidays, your business will not come to a standstill. The bookkeeping company will allocate you a relief person who will know how things are done due to behind the scenes communication, training and documented processes. This affords you peace of mind; you will never be left in the lurch.
I hope the above has been helpful. I know from decades of experience that businesses fail for many reasons, but one is from poor bookkeeping – in fact, it’s the reason 5% of businesses fail. It’s terribly important to have the right person. A spouse with no training and the responsibility of looking after a young family may not be the right choice. A relative who is out of work and needs a job (but doesn’t have the pertinent skills) is definitely not the right choice. Doing it yourself, because you’re quiet and have nothing better to do (and bookkeeping isn’t your forte) is not a good choice. Even if you are good at it, is your time better spent growing your business, getting clients on board and servicing them? If you’d like to know more, give Shirley a call on 0438 382 489.