10 Questions to Ask When Hiring a Bookkeeper

A person in business attire is sitting at a desk, talking on the phone, and using a laptop. Text beside them reads, "Hiring a Bookkeeper? What Questions to Ask.

Great bookkeeping plays a critical role in the success of every business. But not all bookkeepers are the same. Inaccuracies caused by poor bookkeeping can have serious tax ramifications and put you at a disadvantage by not having the data you need to make important business decisions.

When looking for a bookkeeper for your business, it's important that you know what questions to ask. This article examines the benefits of good bookkeeping and makes recommendations for finding the best bookkeeper who suits your unique business needs.

What a bookkeeper can provide for your business

Bookkeepers record a business’s financial transactions and might also perform day-to-day tasks such as recording sales and invoices, paying bills, and processing payroll.

While recording transactions is the first thing that comes to mind when envisioning bookkeeping, a bookkeeper can provide much more value to your business.

Saves you time. If you're like other owners who prefer to do your business’s bookkeeping yourself, you know how difficult and time-consuming it can be. By hiring a bookkeeper, you can save time and focus on other aspects of your business while they handle bookkeeping duties for you.

Saves legal headaches. Accurate financial information can keep you out of trouble with federal, state, and local tax authorities. There could also be other compliance standards you must adhere to, such as creating timely financial statements as you pay back a business loan. A bookkeeper will ensure the data used to create your financial statements are accurate.

Fraud protection. Your business should have at least two sets of eyes looking at every transaction. The person who reconciles your bank account(s) should not be the same person who has access to cash or authorizes transactions. A bookkeeper can serve as this second set of eyes to help ensure you avoid fraud and other unpleasantries.

Helps create management reports. You’ve got all your transactions accurately recorded - money coming in, money going out. A bookkeeper can use this information to create reports and key performance indicators that can help you better manage your business by giving you up-to-the-minute information.

How to Know if You’re Ready to Hire a Bookkeeper

The chances are that you’re wondering if you need a bookkeeper. Here are some guidelines to consider when deciding whether it’s time to start the bookkeeper hiring process.

Transaction backlog. Your transactions should be recorded on a daily basis, or at the very least, on a weekly basis. Your bank accounts should also be reconciled monthly at a minimum. If you’re starting to fall behind on keeping your accounting record up-to-date, then you’re probably ready to hire a bookkeeper.

Your accountant is starting to help with bookkeeping. While many bookkeepers can help with accounting-related tasks, the opposite should never be the case. While accountants can most certainly perform bookkeeping tasks, this isn’t the best use of their time — or your money — because accountants typically cost more than bookkeepers. If your accountant is starting to do more bookkeeping work, then you’re ready to find a dedicated bookkeeper.

You don’t know where your money is going. Many small business owners are so focused on day-to-day operations or providing client services that they don’t regularly monitor their bank accounts. Maybe you’re in a similar situation — you’re not sure when money goes into your bank account, and you’re not always sure where the money goes when it comes out. If you feel like your money is always disappearing (not because of fraud or stealing, per se, but more because you don’t track it on a regular basis), then that’s a sign that you need someone to help you monitor cash coming into and going out of your business.

10 interview questions to ask when looking for a bookkeeper

It’s important to have bookkeeper interview questions ready for prospects to help you pick the one who’s the best fit for your business. Here are some questions to consider asking during your bookkeeper interview process:

Describe your work experience. Why did you decide to become a bookkeeper? When did you decide that being a bookkeeper was the right career path for you?
Tell me about your industry certifications and accreditations. Do you have any experience with my business’s industry?
Can you provide me with any testimonials, references, or case studies from previous clients or employers?
How do you approach working with a business for the first time? How would you familiarize yourself with my business? Do you need access to spreadsheets or tax returns?
Do you prefer working remotely or on-site when performing bookkeeping services?
What's your approach to time management, and what is your typical response time to follow up on client emails and phone messages?
Some bookkeepers are generalists, while others are specialists. Which of these would you consider yourself to be?
Do you provide an engagement letter that clearly outlines what services you will be performing for my business?
What security practices do you follow to make sure my confidential information and financial data remain secure?
What is your fee rate? Do you prefer to work by the hour or charge a flat fee?

Traits of an experienced bookkeeper

These are the top traits you’ll want to make sure that your bookkeeper possesses.

Attention to detail. Nobody’s perfect, but you want your bookkeeper to have a very strong focus when doing their work. They should display a high degree of accuracy.

Ability to understand business strategy. A bookkeeper should be able to think beyond the numbers. After recording your business’s transactions, a bookkeeper should be able to provide, at the very least, some general recommendations on business strategy. For example, being able to recommend where to cut back on expenses, alert you to when you’ve got too much cash in your checking that you should transfer to a higher-yield account, or when revenue is increasing to the point when it might make sense to hire another employee.

Display people skills. Your bookkeeper doesn’t need the personality of a charismatic politician, but you should feel comfortable enough around him or her that conversations come naturally. Soft skills are nearly as important as technical knowledge! It’s important for your bookkeeper to be able to clearly communicate to you what they see happening financially in your business.

You can look for these traits and use these other great suggestions for finding a bookkeeper for your business.

A good bookkeeper can help your business grow and thrive

Finding the right bookkeeper can help your business grow, and hiring the wrong bookkeeper can result in a major setback. You need a problem-solving bookkeeper who is a detail-oriented expert in handling your financial records, income statements, bank statements, cash flow, and more. You need the bookkeeping services from 1-800Accountant, America’s leading virtual accounting firm for small businesses.

Whether it's bookkeeping, payroll, tax advisory, or any of our professional accounting services, we have the affordable pricing solutions you need to help your business stay compliant with an experienced bookkeeper familiar with your state and industry. Schedule a quick consultation – usually 30 minutes or less – to learn more.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.