tips for brilliant bookkeeping
One interesting thing about being an entrepreneur is that you like to look ahead. You tend always to look for the new opportunity, for the next challenge, for tomorrow’s customers. Mostly, it’s a great characteristic to have. However, it does mean that few entrepreneurs relish breaking their stride to deal with a pile of paperwork.
In footballing parlance, entrepreneurs would be the attacking players; the strikers and wingers. But it’s no good being able to score goals if you also keep conceding them, which is why every good attacking team also needs a strong defence and a great goalie. And in the business world, your goalkeeper is your bookkeeper.
Keep your business and personal finances apart
If you’re a sole trader you are not legally obliged to have a separate business bank account – but you should have one nevertheless. Otherwise your books will soon be a nightmare to maintain, unless you record every penny of personal spending too.
Keep clear and separate records
Bookkeeping typically requires at least three ‘books’ (i.e. financial records): the cash book, sales invoices, and purchase invoices. Your cash book records everything passing in and out of the business’s bank account. This record of cash flow makes it an invaluable planning tool, as you can use it to underpin forecasts.
Control your credit
A full sales ledger is a beautiful thing, but if your customers haven’t paid yet, that beauty is only skin-deep. Set strict deadlines for your customers to pay their bills to you, and consider blacklisting repeat offenders if you think they are taking advantage. Chase every late payment, as each is essentially an interest-free loan. Without rigorous credit control, a small business can quickly develop a cash-flow crisis.
How to Help Your Clients Choose the Best Bookkeeper
To some, the roles seem synonymous. Even the dictionary contributes to the confusion, listing both as a person who records the accounts or transactions of a business. Though bookkeepers and accountants deal with the same financial information, they manage different aspects of it. Similar to the relationship of nurse and doctor or carpenter and architect, one handles the day-to-day while the other focuses on the big picture
A Great Bookkeeper has Skills
Unlike an accountant, a bookkeeper doesn’t need a state-issued license to work. Regardless, they should have some level of training or accreditation. Several national associations offer bookkeeping certification, including the National Association of Certified Public Bookkeepers, the American Institute of Professional Bookkeepers and the National Bookkeepers Association. Additionally, bookkeepers can receive training and certification through the QuickBooks ProAdvisor® Program.
A Great Bookkeeper is Experienced
Whether an independent contractor or operating through a firm, a great bookkeeper has experience – preferably in your client’s industry and with the same accounting software you use. When interviewing bookkeeping prospects, business owners should ask in-depth about experience to avoid incorrect assumptions. After asking multiple questions, it may become clear that someone with only two years of industry-specific experience is a better fit for your company than someone with 10 years of general bookkeeping experience
A Great Bookkeeper Wants to Build Their Business
With enough time and attention to detail, anyone can enter numbers into a ledger. But, that’s not what makes a great bookkeeper. A great bookkeeper understands your client’s business, spots red flags, and recognizes opportunities for improvement and growth. A great bookkeeper will ask questions to allocate things correctly; he or she will want to solve problems and implement processes that offer you and your business the most value. To find this trait in a potential employee, you have to know what you’re looking for
A Great Bookkeeper is Someone They Can Trust
More than qualifications and good references, the best bookkeeper is someone you can trust. They should be honest and transparent. They should be easy to reach via phone or email. Whether employed full time, their personality should mesh well with their company culture to ensure the best fit for both of you. Consider interviewing more than once to get a better idea of fit; include trusted employees in the meeting and change the interview location, if necessary
Tips for Hiring the Right Bookkeeper for Your Business
Experience – A good bookkeeper can be the glue that holds an organization together. It is critically important that he/she have experience in bookkeeping for an organization of similar size and complexity to yours. You should also look for someone who has worked in a firm at a similar point in their business lifecycle. For example, the bookkeeping needs of a high-growth start up could be radically different from that of a 30-year-old construction company. An experienced bookkeeper should be able to think ahead and anticipate needs before they arise. They should have experience with your industry and understand its unique bookkeeping requirements
Training and education – A good bookkeeper should be educated and trained and have a high degree of business acumen. While a master’s degree may not be appropriate, it is important that they understand basic business accounting and finance. A bookkeeper should have training and keep abreast of changes to accounting rules and procedures that directly affect their role.
Aptitude for technology – Unless your company is stuck in the 20th century, you should be using a software system to keep your company financials and manage your books. The right bookkeeper should be trained and have experience using your bookkeeping/accounting software. They should be adept at using other common tools such as Microsoft Excel and any industry-specific systems you have (e.g. estimating, billing systems.) They should be able to process online payments; and perform bank reconciliations
Attention to detail – By the nature of the role, a bookkeeper must have a keen attention to detail. They should have an ability to identify errors and balance accounts on the fly. They should be able to generate timely and accurate financial reports that are clear and concise
Credit and cash flow management experience – One of the most important skills a bookkeeper should possess is the ability to keep on top of cash flow and to anticipate cash flow requirements. Factors such as business seasonality, taxes, bonuses and recurring annual events must be considered when determining cash flow needs. The bookkeeper must be able to balance all of these requirements to maintain business stability
How to Hire a Bookkeeper Who Is Right for Your Firm
The COVID-19 pandemic has amplified the need for highly skilled bookkeepers who can help companies keep pace with the critical process of bookkeeping during this challenging period of business disruption. If bookkeeping is not handled effectively, receipts and paperwork will pile up. Bills will be paid late. Invoices won’t get submitted on time. And company expenses won’t get tracked
How to hire a bookkeeper
The first thing to decide is whether you need to hire a bookkeeper full time or engage someone on a temporary or temporary-to-hire basis. You could use a specialized staffing agency to find highly skilled candidates who would be the best fit for your company until you’re ready for a full-time hire
How can you identify the best candidates?
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.
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 candidates 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.
How will you know if a bookkeeper embraces accountability?
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.
Qualities to Look for When Choosing Your Small Business Bookkeeper
Choosing a professional bookkeeping service is one of the easiest ways to help your small business grow! Every company, regardless of size, must accurately track and report the money flowing in and out of its accounts by way of sales, expenses, and salaries, but many entrepreneurs lack the knowledge and experience necessary to make this happen
Finding the Right Small Business Bookkeeper
The internet has made starting a small business easier than ever, so it’s hardly surprising that many of today’s busy entrepreneurs eventually find themselves burdened by make-shift bookkeeping systems that
Reliable
It goes without saying that a quality bookkeeping firm will have all the right credentials, but that doesn’t necessarily guarantee reliability. Look for companies with a long-standing presence that consistently demonstrates their integrity, and ask them to point to current clients who can provide honest opinions on the timeliness, efficiency, and confidentiality of their services. Don’t be afraid to ask a potential bookkeeper how they would handle a financial situation specific to your business.
Well-Informed
Every professional bookkeeper should understand the significance of your company’s income, expenses, assets, liabilities, and equity, but they should also be able to
Organized
Don’t assume that every bookkeeper is fundamentally organized and detail-oriented! Although it tends to go with the territory, experience plays a huge role in the efficient interpretation, reporting, and retrieval of financial data – especially when there are multiple clients involved. Ask about review policies and safety nets, and remember that the more streamlined your bookkeeping service’s operations are, the more positive an impact it will have on your company’s bottom line