A competent bookkeeper steers your business towards growth; they guide your company in exploring opportunities. Meanwhile, an unskilled one will likely cause your business to hemorrhage funds and spiral out of control.
Whether you get bookkeeping services from a professionally certified accountant or a relative, you must be confident that they have an eye towards the company’s profits and bottom line. Here are some things to look out for when evaluating your bookkeeper’s performance.
The promptness of their responses
It can be disconcerting to send a simple request to your bookkeeper and receive radio silence. If requests take forever to process, or if they never get a response at all, you might want to bring this up with your employee.
You could ask why there is a lag between request and fulfillment and set expectations for future behavior. For example, they can shoot you a two-sentence reply that you’ll be late because they’re dealing with many clients or busy with urgent tasks.
How frequently they update the books
Things can come up when you’re a bookkeeper, as they do with other jobs. However, some people manage deadlines despite unforeseen bottlenecks. If you’re always trying to catch up with deadlines, your business will not grow.
You can prevent delays with updates by holding your employee to a deadline and checking in periodically. Consider using remote bookkeeping as well; it will enable you to stick to a schedule easily and allow you to focus on your core competencies.
Their use of bookkeeping terminology
Some people who work as bookkeepers do not know what simple terms like ‘reconciliation,’ ‘assets,’ and ‘liabilities’ mean in the context of accounting. Since you’re preparing documents for external auditors, using industry terms is a must for your employees. Use these terms when you speak with your bookkeeper; that way, they practice it in natural conversation.
If their reports are up to industry standard
As the business owner, you should receive the income statement listing your profit and loss for a given period, your cash flow statement, and your business’ balance sheet.
These are important references to gauge your company’s financial health and should guide all decisions you make. Give your bookkeeper examples of the type of work you expect from them; if they cannot adhere to the standards, you must have a serious discussion on why this is the case.
Whether they give you oversight
Bookkeepers can get so involved in their work that they become unwilling to show anyone else how they organize the books. On the one hand, it could be eccentricity. On the other, it could be a huge red flag that something is wrong; perhaps there has been mismanagement of funds or worse. Always demand oversight and take ownership of the login credentials for your online bookkeeping accounts.
How willing they are to take responsibility
People with good character often make capable employees. Someone can be very talented but also rather unpleasant as a colleague. It can be challenging to seek your bookkeeper’s cooperation if they keep looking for a scapegoat for mistakes. You want someone who will grow with the team, not someone who thinks they are superior.
How often they ask questions
We often think too negatively about asking questions. Instead of viewing it as a sign of incompetence, consider it an indication of someone’s willingness to learn. If your bookkeeper does not ask you anything at all, invite them to do so. Actively encourage people to notice things about their work, since these could be the basis for a new initiative or policy.
The tasks of the bookkeeper can directly affect your margins. He should know how to locate everything about your financial situation, from reports about your profits and losses to historical data about your expenses. As such, it’s essential to be sure that you hired the best person for this job.
Get your business’ finances in order when you leave the bookkeeping to A4E. We provide online bookkeeping services to SaaS and tech companies in Boston, MA, striving for a personalized approach and high-quality services for all of our clients. Get in touch with us today to learn more!