When should you hire a bookkeeper? Ideally, you should bring in someone to handle the day-to-day financial tasks shortly after you start your business. Then you can concentrate on running it — and doing what you do best.
Sure, you can do the bookkeeping yourself and save money. But at some point, this vital business service isn’t going to get the attention it needs. The receipts and paperwork will pile up. Bills will be paid late. Invoices won’t get submitted on time. Company expenses won’t get tracked.
Of all the accounting jobs out there, this position may be the one most critical to your small business success. A good bookkeeper can save you time, provide useful business reports, share insights and red flags with you, and help you manage your cash flow.
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So when should you hire a bookkeeper? The sooner the better.
Finding the right person
The first thing to decide is if you need to hire a bookkeeper full time or to bring in someone as a bookkeeper on a temporary or temporary-to-hire basis. You could use a staffing agency like Accountemps to find highly skilled candidates who would be the best fit for your company until you’re ready for a full-time hire.
Recruiters look for bookkeeping candidates who are self-starters with solid communication, organizational and customer service skills. Technology expertise typically includes experience and proficiency with applications such as Microsoft Excel or QuickBooks.
What do bookkeepers do?
Typical duties include these essential bookkeeping tasks:
- Reconciling bank statements
- Processing payroll, accounts payable and accounts receivable
- Posting and updating journal entries
- Performing month-end closings
- Tracking fixed assets and preparing depreciation schedules
- Preparing the trial balance
Bookkeepers are expected to use their problem-solving abilities to resolve discrepancies, communication skills to produce easy-to-absorb reports and work well with other team members, and soft skills to work with vendors, suppliers and customers.
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How can you identify the best candidates for your company?
Bookkeeping practices vary between industries, so look for a track record relevant to your line of work. A bookkeeper who has worked only with fashion retailers, for instance, may not have the knowledge and experience to do an equally good job for an air-conditioning company. In other words, the relevance of a candidate's experience is often more important than the duration of experience.
You also want to be sure that your bookkeeper has experience with the recordkeeping system and software your organization uses, or you'll need to provide training.
To assess whether a bookkeeper will be able to work effectively in your industry, ask some of these essential interview questions:
- Tell me about your previous bookkeeping experience.
- What were your primary responsibilities?
- What kinds of financial reports did you prepare?
- What types of accounting systems did you use?
Do you need to look for certifications or memberships?
Bookkeepers in the United States are not legally required to obtain a license, but they can participate in several voluntary certification programs. When candidate are certified or licensed by the National Association of Certified Public Bookkeepers (NACPB) or the American Institute of Professional Bookkeepers (AIPB), it generally means their knowledge and skills are up-to-date. Ask them if they carry any certifications.
The same is true of professional memberships. Bookkeepers have to pass the membership criteria of a professional organization before they're allowed to join, so you can take professional memberships as an indicator of your candidate's professional status and commitment to his or her career.
An active membership in a professional group also helps a bookkeeper stay current with news, trends and best practices in the industry. In addition, members sometimes carry professional indemnity insurance through these groups, which offers added peace of mind for you.
How will you know if a bookkeeper is doing a good job?
A good bookkeeper keeps your books clean and makes it easy for you to review and query the entries. A bad one leaves your books in shambles and runs away at the first sign of an independent audit. So it's no use hiring a bookkeeper you can't trust. Do your due diligence and ask for reference checks from accountants who have worked with your bookkeeping candidates.
For added assurance of transparency and accountability, you might want to try values-focused interview questions to get a sense of which candidates are the most honest and reliable, such as:
- Can you tell me about a time when someone claimed credit for work that you did? What did you do about it?
- Has your trustworthiness ever been challenged? What was your response to the situation?
- Tell me about a time when you made a mistake. What did you learn from it?
These questions should give some insight into how the candidate thinks and processes challenging scenarios in a professional environment.
Benefits of hiring a bookkeeper
Peace of mind? Yes, that’s one thing. What other advantages are there to hiring a bookkeeper?
- Fewer data entry mistakes — Not only can bookkeepers fix errors in financial transactions, but they can keep them from happening. That can save you money when you don’t have to pay late fees, and help you get paid faster when your invoices get sent out more effectively.
- Numerical clarification — If you see anything irregular or aren’t sure about your profit and loss or any bookkeeping matters, you have someone who can resolve those issues.
- Simpler tax season — Uncategorized expenses? You won’t have that with a good bookkeeper, and you won’t miss any tax writeoffs, either.
How are bookkeepers different from accountants?
Bookkeepers are expected to do the day-to-day recording of receipts, invoices and other transactions. Hiring an accountant will provide business insights based on bookkeeping information.
Accountants are often asked to interpret complex data and analyses, with duties such as producing profit-and-loss statements and filing taxes. Financial accountants calculate assets and liabilities and show outside investors how a firm is doing. Cost accountants analyze financial processes within an organization and makes recommendations for improved cost-control management.
If you’re like most business owners, you’re not so interested in recording all the details of every financial transaction. A bookkeeper would do that. And when you need high-level business advice and official reports, you need to hire an accountant. Both will be trusted with the details of your business finances so you can do what you do best — running your business.
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