Bookkeepers are exactly that, they keep your books. Some keep them in order and do a great job, while others are merely glorified data entry clerks! So how do you tell the difference?
There are seven key things I look for when hiring another bookkeeper to assist my clients:
1. Attention To Detail
This is an absolute prerequisite, there’s no give here at all. If a bookkeeper does not have attention to detail it can cost you money later. How? Well, once year-end comes around and those books have been sent to the accountant, they have to clean up any mess that has not been dealt with by the bookkeeper.
- No attention to detail = mess.
- Mess = Time.
- Time is money and in the case of your accountant, his time = your money.
2. Basic Understanding of Accounting
This is not a prerequisite but life is much easier for you if your bookkeeper has a basic understanding of accounting. To elaborate, they need to understand that a transaction they create, or a change in suppliers (for example) has an impact on the profit and loss and balance sheet.
Editing and changing a transaction can be a major issue. It can upset reconciliations and balances, so it’s imperative that your bookkeeper understands what impact a change will have before it’s made.
3. Clear Understanding of GST
Your bookkeeper needs to understand how to process transactions in relation to GST; what incurs GST and what doesn’t, in order to create an accurate Business Activity Statement.
Also new legislation (effective 1/3/2010) requires that bookkeepers who are completing business activity statements are registered as a BAS agent with the Tax Practitioners Board.
4. Should be Willing to Work with Your Accountant
I consider this to be another imperative skill. If a bookkeeper isn’t willing to work with your accountant, I wonder what they have got to hide. Is their work substandard i.e. will it show upon closer inspection by your accountant?
Accountants only ever want what’s best for the client. As such, they’ll sometimes need to instruct the bookkeeper how to do something that is outside their realm of understanding. A willingness on the part of the bookkeeper to learn from the accountant shows that your bookkeeper is keen to continue learning and grow as a professional.
I simply would not use a bookkeeper who is not interested in learning new skills. Let’s face it, rules change all the time and we need to keep up with them. There’s no need to keep up with all the tax changes, but there are items that affect everyday bookkeeping for clients.
Which brings me to my next point….
5. Membership Of Professional Body
This is not essential, however, if your bookkeeper has membership to a professional body you’ll know that they will be updated on relevant news. Also, you can be assured that they have passed (what can be) stringent criteria to be admitted as a member.
Depending on the membership they may also be required to have professional indemnity insurance. This is handy for you as you know they have also qualified for this cover.
6. Knowledge of More Than One Accounting Software Package
Again, this is not imperative but it does give the bookkeeper more scope in terms of making your accounting software complete a new task. Sometimes having the knowledge of different software allows you to think outside the square when solving problems. It enables you to come up with rather unique ways of completing something, even if it’s not the most obvious path.
My motto is, if the accounting software support team says it can’t be done, I find a way. And I can safely say that the majority of times I have been able to do this!
7. Referrals
Your Bookkeeper must come armed with a list of referrals that you can contact. Why is this important? They may have a long list of clients but unless those clients are willing to confirm the bookkeeper is worth their weight in gold, why bother? Even better, is if they offer an accountant they work with as referral!
One final point. A bookkeeper is a major part of your team, even if they only work for you once a month. Like any other team member, they need to fit into your organisation in terms of personality and work ethic.
It’s also handy if you know they have backup staff (i.e. they’re not a solo operator). This is important for when they’re on holidays, or off sick. Getting behind in your bookkeeping is not an acceptable situation and as such you need to ensure that appropriate backup is available.
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Great article.
I enjoyed reading it, very informative.