What Should I Prepare Before Hiring a Bookkeeper?
Understanding Your Business Needs
When searching for a bookkeeper, you need to determine your business’s financial requirements. It’s important to note that different businesses and business sizes may have different financial needs. For instance, a smaller business may only need assistance to record simple transactions, whereas a larger business may need more sophisticated financial reporting or they may need to comply with specific regulations. Firstly, identify where you are struggling most, for example, accounts payable and receivable, or tax returns.
You can also assess how many transactions you have to record, which will help you to decide what you need. For example, does your business have a lot of transactions or seasonal changes in your financial needs? This assessment can guide you in deciding whether you require continuous support or occasional support at certain times throughout the year.
Another factor to consider is your financial process. Take a look at your current bookkeeping system and if it has any shortcomings. Are there mistakes, missed deadlines or problems with reconciling accounts? Identifying these problems can help determine what skills you’re looking for in a bookkeeper.
You also need to take into consideration the type of financial software and tools you are using, and how these are being integrated into your business. If you’re using certain financial software, such as QuickBooks or Xero, ensure your bookkeeper has experience with that software. This will save time, and ensure your books are current and accurate.
Finally, think of your industry needs. You may have particular financial requirements, for instance, if you are in a healthcare business, or a construction business. A professional bookkeeper can advise you and see you’re meeting those needs. This will help you plan ahead when searching for a bookkeeper to ensure they will fit in with your business processes and needs.
Organizing Financial Documents
To make bookkeeping as easy as possible it’s important to have organized and readily accessible financial documents. Gather documents such as transactions, receipts, expenses, payroll and other financial documents. This will help provide the bookkeeper with a snapshot of your business transactions, and promote efficiency in their work.
Organize your documents. Separate documents into income, expenses, assets and liabilities. Keep them in electronic or physical files, clearly labelled. If you have physical copies, get them scanned to make it quicker and easier to send documents to the bookkeeper. You can also store documents in the cloud, or use document management software.
Review your present financial processes and make sure you have all the required data. For instance, ensure you have all receipts and invoices and they are linked to the correct transactions. Be aware of any errors or inconsistencies in your data as these will take time to fix.
You also want to ensure your accounting software is up-to-date. If you use accounting software like QuickBooks or Xero check your accounts are set up and up-to-date. So, this means transactions are entered accurately and accounts are reconciled to check the balances. If you are new to using financial software, this may be the time to do so or ask your bookkeeper for advice on what software may be right for your business.
Set up a process for document organization for the future. Determine how you will process new paperwork in the future, such as weekly uploads to a shared system or a regular filing system. It will be easier for the bookkeeper, and it will help your business down the track by promoting timely and accurate financial practices.
Creating a Budget for Bookkeeping Services
A budget for a bookkeeper should be based on the services required by your business, and the budget available as a result. For example, some businesses may require bookkeepers to regularly record transactions, process payroll or conduct advanced financial analysis, and the price of these services will vary depending on the services and expertise needed. Knowing your business needs will enable you to determine how much bookkeeping will cost.
Consider the various pricing models bookkeepers may charge, such as hourly rates, monthly retainers or flat fees for certain services. They all have their advantages and disadvantages, so consider what might be suitable for your business. For example, if you have fluctuating needs for bookkeeping services, hourly rates may be better. But if you need bookkeeping services all year round, then a monthly retainer fee may be more suitable.
As well as the basic fee, consider other fees. For instance, this may include additional services, software fees or software integration if you’re switching accounting software. Ask about these fees when interviewing bookkeepers so you don’t encounter fees you haven’t budgeted for.
When it comes to bookkeeping, quality is important. While it’s easy to be lured by the lowest price, think about how much time (and therefore money) a good bookkeeper will save your business in the long run by minimizing mistakes, increasing efficiency and providing advice. And strike a balance between cost and quality for value for money.
Finally, think about the cost of hiring a bookkeeper and how this will impact on the budget. A great bookkeeper will allow you to focus on other important aspects of your business, which will help your business grow and thrive. By planning properly, you will be able to budget and then hire the bookkeeper.
Setting Expectations and Objectives
With a bookkeeper, you will have to plan what you want them to do. Decide on the work they will do, for example account reconciliation, reporting and tax. This will help prevent any misunderstanding of responsibilities and expectations for your business.
Establish a process for financial data reporting. For example, decide how often they will report information, how it will be presented and how you will communicate reports. This will keep the channels of communication open and keep your bookkeeper on track to provide you with timely and accurate information.
Also discuss data privacy. Data privacy is important in accounting so talk to your bookkeeper about data privacy. You may want to put this in writing to protect your business.
If there are certain areas that you want to improve in the accounting process, let them know. For instance, this could be cash flow or late payments to vendors. This will help the bookkeeper prioritize activities towards achieving your business objectives.
Decide who will have the final say in making decisions, especially when the bookkeeper has access to accounts and/or makes transactions. Decide what can be left to the bookkeeper’s judgement. This will keep you in charge, while allowing the bookkeeper to do their work.
And finally, set up a regular meeting schedule. These can be used to discuss the work, troubleshoot problems and realign priorities as your business evolves.
Researching Potential Bookkeepers
When it comes to finding someone to bookkeep your business, due diligence is key. It’s best to find someone with credentials such as a Certified Public Bookkeeper (CPB) or with certification in the accounting system you might be using. This may help ensure they are competent and understand accounting principles.
Inquire about their background, and whether they’ve worked for a company in the same sector as you and of a similar size. An expert bookkeeper will be able to tackle your financial problems. They might also be aware of any industry-specific regulations and challenges you could face and this will save you time and errors.
When recruiting, look for candidates with strong organizational skills, attention to detail and who are proactive at identifying issues. These skills are necessary for timely and accurate record keeping and to spot problems.
Don’t forget to ask about communication preferences. A proactive bookkeeper who can explain financial concepts in layman’s terms will be important, particularly if you are not a financial expert. And, ask whether they work with other financial professionals you might need such as an accountant or tax preparer.
Ask other advisors, read client testimonials and ask for referrals to find out. Request referrals and talk to their clients to assess their trustworthiness and credibility.
In interviews, talk to them about how they manage various bookkeeping tasks for your type of business. Ask them about how they have assisted other clients and solved problems. This will help you to determine how they align with your requirements and goals.
Through careful evaluation of potential bookkeepers, you’ll be on your way to hiring a bookkeeper to assist with your finances.