Tuesday, April 25, 2006

Time to Hire a Bookkeeper?

Many a small business owner faced with hiring a bookkeeper for the first time faces a frightening hurdle. Hire the wrong bookkeeper and you could end up with more problems than you had before you hired. Whether you’re searching for an employee or looking to outsource the bookkeeping function getting the right fit is critical to your success and your sanity.

But, how do you know what to look for in a bookkeeper if you don’t really understand the whole accounting thing yourself?

Do you need someone with a degree?

How do you measure a candidate’s experience?

How do you know whether they know what they’re doing?

How can you ask informed questions if you secretly feel un-informed yourself?

It’s a sticky problem and one that many small business owners face. They don’t want to end up in trouble if they hire a bookkeeper who doesn’t know his stuff. They feel out of control because they only know what the bookkeeper tells them and who knows if it’s right?

The following tips will help take some of the mystery out of finding a bookkeeper who is both knowledgeable and a good fit for your business.

1. How important is a degree?

The short answer is—not very. A degree in accounting isn’t really necessary. It’s nice but experience matters more. That being said, a person with an associate’s degree in accounting at least has the gumption to achieve a big goal and has some level of exposure to proper accounting procedures. Some people come out of a degree program well prepared to step into an already set up, well functioning accounting situation (as long as there is someone to train them). Most new graduates are not equipped to step into a chaotic or newly created position—that level of comfort and knowledge only comes with experience.

2. What about certification?

A certified bookkeeper is a bookkeeper who has passed an examination and met certain criteria. It is a good indication of two things—the person is willing to invest in furthering his or her skills and they have mastered a full range of bookkeeping topics. Unfortunately, it is not as wide spread a certification as it needs to be. Many bookkeepers may not even be aware that becoming certified is an option. A non-certified bookkeeper could be asked questions about what he or she is doing for continuing education.

3. What kind of experience should you look for?

Optimally, an experienced bookkeeper will have worked in several different type of businesses—ideally at least one like yours. Hiring someone who has handled the entire range of bookkeeping tasks with minimal supervision is critical. If you’re not an “accounting person”, you aren’t going to be able to answer your bookkeepers accounting questions. If you have a CPA or CFO working with your business, a little less experience is okay if the bookkeeper can go to him or her with questions. (Note: if your CPA charges by the hour this could get costly—so again more experience can save you in the long run.)

4. What about character?

Character is critical on two fronts. If you’re the type of business owner who likes to cut corners, hide income, and conduct business on the shady side of the street, hiring a bookkeeper of good character will only create aggravation for the bookkeeper. In the same light, a bookkeeper of weak character may perform slipshod work or embezzle. How can you determine good character? Ask questions about how they’ve dealt with a tough situation like someone asking them to do something illegal or unethical. Also, ask for character references and ask similar questions. “Tell me about a situation where Beth had to handle a difficult client or co-worker.” Asking pointed questions lead to pointed answers.

5. What about personality?

Is this person someone you think you will feel comfortable working with? The business owner/bookkeeper relationship often ends up feeling a bit like a marriage. Your bookkeeper will know your financial details, your character flaws, and how you act when you’re stressed out. Make sure you have the potential to be a good team.

A skilled and experienced bookkeeper can do much to keep you out of trouble and keep your business running smoothly. Whether you hire in house or outsource, finding the right fit is the key to a successful relationship.

Until next time,

Caroline Jordan
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