Your business is growing, and you’ve now made the wise decision to outsource your bookkeeping so that you can focus your time and energy on growing your business.
“I’d say as soon as you know you have a real business, start to
delegate everything you possibly can, so you can focus on growth. Delegating
bookkeeping should be one of the first things.”
So,
what would you ask a bookkeeper before you hired them to make sure that they
were right for you and your business?
This
was the question that we posed to several business owners whilst doing research
for this post, and whilst a handful of responses does not make for a conclusive
sample size, the responses we did receive highlighted a few interesting points:
“I wouldn’t have questions. I tend to go on
either recommendations or work with people I’ve got a relationship with.”
“I’d dig through friend and peer recommendations, reviews online
(although you can’t always trust them) and also how they seem to handle things
re: their content marketing and the like. I doubt I’d even know the questions
to ask beyond ‘I need this, can you do that?’”
What it comes down to is
that for many business owners they actually have no clue what to ask.
This is
not surprising because, for many business owners, qualifying potential
bookkeepers fall under their “unconscious incompetence” stage of
understanding.
Most
business owners simply don’t know what they don’t know when it
comes to asking the right questions before they hire a bookkeeper (or change
bookkeepers).
The problem is that this
is a major risk for your business.
Would
you rush into hiring and managing staff the essential or onboarding to optimize for customers trust without carefully considering
what the best choices are for your business?
We sure hope not!
So we
wouldn’t recommend that you rush into hiring a bookkeeper without asking them
some key questions to determine whether or not they are a performing team for
your business.
How Does a Bookkeeper Help Business?
A bookkeeper can help you reach the next level following the growth of your
business. Instead of having to focus important time on your accounting, hiring
a bookkeeper allows you to focus more on the core principles and strategies of
the business instead, so you can keep your eyes on the long term goals of the
business.
When
you use a bookkeeper for business, things will be much more accurate as well.
However, not all bookkeepers are created equal and not everyone can satisfy
your unique business needs, which is why these questions will prove to be
important as you begin your search for the best bookkeeper for your business.
Here are 10 questions
that will help you decide if a bookkeeper is right for you or not.
1. What is the scope of the bookkeeping work?
This
may sound like a simple question, but there is a big variation between the
services that bookkeepers offer. Your requirements will also vary depending on
your own skills and the scope of the work your accountant completes.
Some
bookkeepers act as management accountants and can help to interpret the figures
and other bookkeeper’s skills are limited to data entry.
Consider who will do the
following:
·
Reconciling
bank transactions (and how often? Daily/weekly / monthly)
·
Entering
supplier bills and paying suppliers?
·
Raising
sales invoices and following up with debtors
·
Checking
the coding of transactions to ensure they have been coded to the correct
account and with the correct tax treatment
·
Lodging
/ filing sales tax, GST or VAT
·
Prepare
reports such as Profit and Loss and Balance Sheet
·
Help to
interpret the reports and tell the story behind the numbers
·
Prepare
a budget to monitor performance against
·
Prepare
a cash-flow forecast to help plan cash inflows/outflows in the future
2. Are they registered and qualified?
You
will find that some bookkeepers will have a diploma, accounting degree or may
even be Chartered Accountants or CPAs.
If your
bookkeeper is going to be lodging your Business Activity Statement in Nigeria
then, at a minimum, your bookkeeper should be a Registered Business Activity Statement
agent. The qualification and registration requirements differ from country to
country. Be sure to ask your bookkeeper what their qualifications are and
whether they are registered to lodge / file sales tax in your country.
Remember,
some bookkeepers are specialists while others are more generalists. When
hiring, you need to determine the specific needs of your business to ensure
that whoever you hire can handle the workload. If there are more challenging aspects to your bookkeeping, you will want a more specialized
bookkeeper on your payroll.
3. What is their level of expertise?
You
want your bookkeeper to process your accounts accurately and on time and to
communicate with you in a way that doesn’t take up much of your time. You don’t
want to get to the end of the financial year and have to pay your accountant to
clean up a mess.
You
probably aren’t expert bookkeepers, so sometimes it can be hard to work out
what level of expertise the bookkeeper you are engaging is.
A good
bookkeeper processes transactions accurately, but a great bookkeeper can go
back and review their own work to identify errors and then correct them.
You could also ask to
talk with one of their clients or an accountant that they work with.
Some
may also be looking for a more detail-oriented bookkeeper while others may want
someone who is more strategic.
So,
depending on your business style, this is another thing you will want to keep
in mind. It never hurts to really dig into their expertise and work experience
to find out where their strengths and weaknesses lie.
4. How familiar are they with your industry?
If the
bookkeeper is unfamiliar with your industry there may be a learning curve while
they familiarize themselves.
We recommend
asking whether they have any other clients in your industry (past or present)
and ask them to give a few examples of common bookkeeping issues that come up
related to your industry and how they would resolve them.
5. How do they communicate with their clients?
Processing
the day to day transactions in your accounting software is one element of
bookkeeping. You are likely going to be communicating regularly with
your bookkeeper, especially in the first few months of working together.
As a
business owner, your time is valuable and working with a bookkeeper who takes
up hours of your time with ineffective communication will slow down your
business growth.
What
are they like to communicate with? Are they clear and concise, and speak or write
in a language that makes sense to you?
Make
sure to ask how they normally communicate with their clients.
This will usually be via phone or email.
If you
prefer phone calls, then ask whether your bookkeeper offers phone support. If
you prefer email correspondence, then reflect on the emails you’ve received
from them so far.
Also,
keep in mind that the bookkeeper you initially interview may not actually be
the one who will be working for you. Some firms go through
different clients and establishing a point of contact may sometimes prove
difficult. So, determine if you want to go through an independent bookkeeper or
a bookkeeping service.
6. What can you expect around delivery times
and response times?
A a common complaint about bookkeepers is that they can be slow to respond to
emails and that the bookkeeping isn’t completed to a set schedule.
Ask
about what you can expect each week/month from them and what the expected
response times are you to your questions.
7. Are you hiring the bookkeeper directly or
working with a bookkeeping business?
If you
hire a bookkeeper directly who isn’t part of a bigger team, then ask questions about
a back-up plan. What will you do if this bookkeeper is sick or has an accident?
How will you make sure your team and suppliers get paid, and your customers are
paying you?
Working with a
bookkeeping business with multiple staff
Hiring
a bookkeeping business rather than an individual bookkeeper helps spread the
risk. However, with a bookkeeping team, it is likely that the person you are
scoping out the bookkeeping job will be different from the team member who does
your processing.
In this case, ask about
what quality control and internal review procedures they have.
For example, at Bean Ninjas, all client work is reviewed by a Team Leader or
Manager before going to a client.
8. How do they protect their clients?
You are
sharing your financial information with a bookkeeper, so you need to feel like
you can trust them. You will probably get a feel for this during the initial
scoping process.
Ask about internal
controls and segregation of duties.
The
term ‘segregation of duties’ means that rather than having one person
responsible for every aspect of a role, split the responsibilities among
multiple people.
We
recommend that you create a segregation of duties between the role of the person completing bank reconciliations and the person raising invoices or
paying bills.
9. How do they price their services?
How will the bookkeeper
charge? Is there a fixed monthly fee, or do they charge by the hour?
The trend in bookkeeping is to charge a fixed rate. If this is the case, make sure
you are clear about what is and isn’t included in that fixed rate.
10. Who will own the Xero subscription?
This is
important! We recommend that the business owner holds the subscription in their
own name and then invites the accountant and bookkeeper into the Xero file.
There
have been instances of accountants refusing to give access to Xero, where there
have been disputes over bills. We believe clients ‘own’ their data and
recommend they hold the Xero subscription in their name.
When to Outsource Bookkeeping Tasks
Still
not convinced that you need to hire a bookkeeper or getting cold feet now that
you know what kind of information you need to gather when hiring a bookkeeper
for your business?
Professional
bookkeeping services are always ideal as your business grows. Simply having
someone there to help with customer billing questions and account questions can
help immensely.
Just
take your time to do your research and make sure to ask all the right questions
before hiring a professional bookkeeper and beginning the onboarding process.
The interview process will prove to be very advantageous and will help ensure
success during the hiring process.
The
sample interview questions we have included above are just a few ideas and are
there to offer you a starting off point as you search for professional
bookkeepers.
Depending in your industry, you may want to find ways to personalize the questions, even
more, to make them make more sense for your industry. Take the time to find
someone professional and qualified, and one that best fits your company vision.
Finding the Right Bookkeeper
In summary, the right bookkeeper for your business possesses the
technical knowledge needed to complete the job successfully, one that is
considered an expert in your particular industry, or even one that is ready and
willing to learn.
They
should be passionate about what they do, and this will reflect in their work,
and they should fit within the culture of your company while also aligning with
your goals and objectives.
So,
there you have it, 10 powerful bookkeeper interview questions that you can ask
your potential bookkeeper to ensure that whoever you’re about to hire is
credible, qualified, knowledgeable, and has your best interest
in mind.
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