Last week, I reminded all the small business owners out there, who got extensions on their 2016 tax returns, to file their taxes. I also told you to fire your mom if she’s your bookkeeper and hasn’t been keeping up on your books. Sorry moms, we still love you for everything else you do!
Now I know, I talk tough sometimes when it comes to bookkeeping, but your bookkeeper needs to keep certain industry standards. He or she should be reminding you about paying your payroll taxes, he or she should be updating your books regularly and he or she should know where your books stand whenever you ask. If any of these things aren’t happening, then your bookkeeper sucks and you might need to replace them.
Here are some signs to look out for to avoid hiring a bad bookkeeper:
- REGULAR RECONCILIATION – When you ask to see your books, does your bookkeeper push it off until tomorrow? If you wanted to see an entry from last week, would it be there? If your bookkeeper isn’t reconciling your books regularly, or doesn’t even know what the word reconciliation means, then your bookkeeper is doing a lousy job and you may need to consider firing them and hiring someone else. You may also want to think about hiring a certified bookkeeping firm. Some small business owners are scared off by that because they think the cost will be too high. But consider the savings from not having to pay benefits to an in-house bookkeeper.
- YOUR COMPANY OVERDRAWS CHECKS – Do you have a bookkeeper, yet you still overdraw or bounce checks regularly? That should never happen! When you ask your bookkeeper about it, can they tell you why? If not, then you need a new bookkeeper. Your bookkeeper is responsible for making sure your books are balanced every single day. In addition, your bookkeeper needs to create a Profit and Loss Statement regularly and should review it with you. If he or she isn’t doing this and can’t answer all of your questions about your company’s financials, then you need a second opinion or a new bookkeeper.
- LACK OF COMMUNICATION – Does your bookkeeper respond promptly to your emails? If he or she doesn’t get back to you within a reasonable amount of time, especially if he or she is in-house, then there’s a problem. If you have an in-house bookkeeper, then you should be scheduling a daily conversation and expecting emails to be returned immediately. If you have a bookkeeping firm, and your account executive isn’t replying to you, then talk to his or her boss or look for another bookkeeping firm. At Brigade Bookkeeping, we schedule daily or weekly conference calls with our clients and make it a point to reply to all emails within a set time.
- FINANCIAL SOLUTIONS – As an accountant, who happens to have a bookkeeping business, I love numbers and love to share them with my clients. Does your bookkeeper offer any ideas on how your company can save money or increase sales? If not, that’s a problem. Bookkeepers are not only there to keep your books in order, but when he or she sees a way your company can improve its financials, your bookkeeper should be passing along that information and discussing it with you.
If you feel your bookkeeper has no idea what he or she is doing or you’re questioning the accuracy of your books, then you probably have a bad bookkeeper and you need to begin a search for a new one.
If the person you’re paying to keep your books isn’t doing his or her job, then you need to make a change. You can always e-mail me or someone on my Brigade Bookkeeping team to get a second opinion before you make any brash decisions. As a small business owner, you can’t afford to have doubt in your bookkeeper or the way he or she keeps (or doesn’t keep) your company’s precious financials. Ponder that!