Are All Bookkeepers Created Equal

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Are all bookkeepers created equal

ARE ALL BOOKKEEPERS CREATED EQUAL?

How To Choose The Right Bookkeeper For Your Business

Employing or contracting a bookkeeper. Which is right for you?

For the small or medium business owner, having a good bookkeeper is as essential as it is for big businesses. A good bookkeeper not only keeps all your ‘books’ up to date and more accurate to save you time and money doing it yourself, but they can also provide various other services that are highly beneficial and financially positive for your business as well. Things like saving you from late penalties and fines, finding right-offs you didn’t know were there, making sure creditors are not over-paid, debtors get their invoices and reminders on time, knowing your various obligations to lawful entities are just a few of these services.

How many of a bookkeeper’s services your business requires will vary greatly from business to business, so knowing what type of bookkeeper to choose is an important decision.
If you feel that there is enough work for a bookkeeper to be employed by your business, then you might choose to go that way. However, if you feel you need far more flexibility then contracting a bookkeeper through someone like Positive Traction Bookkeeping might be your best choice. You might even want a bookkeeper dedicated to your business full-time but still prefer a bookkeeping business such as Positive Traction Bookkeeping to employ that person and oversee their work for you.
To make this decision, you are likely to need answers to questions, questions that many business owners wouldn’t know to ask.

How do businesses choose their bookkeepers?

Again, this is dependent on the business and whether they prefer to have a bookkeeper employed by their business or contract a bookkeeper for certain services and hours per week. At Positive Traction Bookkeeping, we have many clients who require our services for only a small number of hours each week and others that require a huge number of hours. We offer such flexibility and many of our clients need that.
For those employing a bookkeeper with their business, the choice is usually made by reading resumés and getting a ‘feel’ for the person in an interview. Qualifications and experience matter for sure, but are they diligent? Detail driven? Are they someone who thrives on best practices? Or someone just wanting to make a buck as opposed to being invested in your business success? Can they offer related services as opposed to just doing strictly bookkeeping tasks only?

For those looking to contract a bookkeeper, whether on limited services and hours or for many services and hours, choosing the bookkeeper or bookkeeping business might be more likely made through referral and/or by reading websites, social media, testimonials, and a phone call. All valid ways to gather information to make your shortlist.

Knowing the right questions to ask

So, what questions will give you the answers that help you choose the right bookkeeper? Depending on your business or industry, you may have some questions unique to your business that are important. You may have questions you need to ask yourself, and some you need to ask the prospective bookkeepers.

One question worth asking right away is:

Is there an advantage to using a bookkeeping company like Positive Traction Bookkeeping?

Quite possibly yes. Individual bookkeepers, especially those who have been employed for long periods by a single employer, are often very experienced in bookkeeping for the industry that their employer is in. If your business is in the same or similar industry, then perhaps employing a bookkeeper with your business is an advantage. On the other hand, one of our senior bookkeepers came from such circumstances where she has decades of experience employed by large companies. Wanting much more variety in her working life, she is now a key element with us at Positive Traction Bookkeeping. What she has found is that, even with so much corporate bookkeeping experience, she has learnt or re-learnt plenty working for us, and continues to learn constantly. By having a huge number of clients across a wide range of industries, and several within similar industries to each other, our Positive Traction Bookkeeping team have knowledge and experience suitable for most businesses out there. We make sure our bookkeepers all have a variety of clients to service where possible to avoid any stagnation of skills or tunnel vision in their work thinking. It also means they can cover each other when anybody is sick, injured or otherwise unable to bookkeep for any period of time. Having our senior bookkeepers overseeing all bookkeeping work also helps to make certain that all boxes are ticked and services are delivered in a timely manner for each client. In these ways, contracting a company like Positive Traction Bookkeeping is definitely an advantage.

Ask Yourself

The next set of questions you ask might be to help you decide exactly what you need your bookkeeper to do? Although, after questioning your prospective bookkeepers, you may learn about tasks and services they can offer you, that you were unaware could be options for you.

You may have administrative staff that can handle some minor bookkeeping tasks. You or your partner may do some of these things presently. In this case, you may only need the more intense bookkeeping services taken care of by the bookkeeper you seek. On the other hand, you may be setting up a new business, with a head-spinning load of things to get set up and going. That’s where contracting someone like Positive Traction Bookkeeping can be a real ‘god-send’ so to speak. We can help you to get many vital elements in place from your ASIC and ATO obligations through to your Superannuation Guarantee and payroll on top of all the general bookkeeping that goes along with this process.

Ask yourself who will do the following?

Develop a plan of what your bookkeeper will be required to take care of from a list of bookkeeping services such as the following:

  • BAS reconciliation & lodgement (if your bookkeeper is also a BAS Agent)
  • Payroll
  • Superannuation
  • Invoicing
  • Accounts payable
  • Accounts receivable
  • Profit & loss statements
  • Payment receipts
  • Bank reconciliations
  • Financial reports
  • Creditor payments
  • Budgeting
  • Month-end general ledger reconciliations
  • Data entry

Once you have an idea of the services you will require from your prospective bookkeeper, asking a few key questions before employing or contracting them is a good idea. Here are a few to think about.

Are they qualified?

To answer the question in our article title, no, not all bookkeepers are created equal. There are a variety of qualifications a bookkeeper may have. At a minimum, certificate 4 in bookkeeping and accounting is a must in our view and all bookkeepers at Positive Traction Bookkeeping must have at least that qualification. Our CEO is also a registered BAS Agent (with other bookkeepers in our employ studying this qualification also) which is another helpful qualification for a bookkeeper to possess, as bookkeeping charges for lodging BAS are usually much cheaper than having your accountant do it. Other accountancy qualifications such as the diploma of accounting might be beneficial, especially for senior bookkeeping staff. We have someone at Positive Traction Bookkeeping studying this diploma at the time of writing.

Do they understand your industry?

In the end, a decent bookkeeper will learn about your industry as they go but hiring a bookkeeper with some knowledge of what your business is about is always an advantage as opposed to a steep learning curve for the bookkeeper to get up to speed. As mentioned earlier, with a wide range of clients with Positive Traction Bookkeeping, we usually have enough understanding of your industry or a similar industry to be helpful right away.

How contactable are they?

For some bookkeepers, getting back to you some time that day or the next is good service. For any thriving business, being able to get direct contact with your bookkeeper is vital much of the time. Like any busy business, your bookkeeper might not be able to answer the phone every time or email back right away. At Positive Traction Bookkeeping, we are no different, but we do think answering the phone is an important part of our service, as is calling back as soon as possible if we missed a call or answering an email as soon as practical. Make sure your prospective bookkeeper understands what you expect and need from them in this regard.

How expedient are their services?

A thriving business also needs certain services and tasks to be provided at times that are suitable to them. Some bookkeepers may not be willing or capable of being quite so expedient or flexible and may take much longer to complete bookkeeping services for you than you require. This is another advantage of hiring a company like Positive Traction Bookkeeping as we can use our various bookkeepers to help each other to keep up to a reasonable pace suitable to each client. For us, it depends on the client’s business requirements. We have many clients that need answers or services rendered that day or even within that hour, whereas other clients rarely need things done so quickly. It’s about tailoring our services to suit the client.

Can you contact previous or current clients as a reference?

Will your prospective new bookkeeper give you contact details for their previous clients so you can hear the client’s thoughts on their work and services? It’s all well and good to read nice resumés and hear all the reasons you should employ or contract a bookkeeper from the bookkeeper themselves, but they are hardly going to tell you their downsides or failings. Speaking to a few of their clients can give you a much wider image of who they are and what you might expect from them.

How will your business information be protected?

How will your business financial and intellectual property be protected by your prospective new bookkeeper? How many people have access? How seriously will they take protecting your business at all? We can’t answer for others, but we would like to think that reputable bookkeepers do take reasonable steps in this regard.
At Positive Traction Bookkeeping we definitely do. We run password and accounting software where only our senior bookkeepers have access. Furthermore, we limit access to our individual bookkeepers for information that does not pertain to their respective duties.

For those clients where paper receipts are given to us, we scan the receipts into accounting software and the paper receipts are then either returned (upon request) or shredded. Nothing is left to chance. Lastly, all our bookkeepers are bound by legal contracts they sign in order to work for us. These agreements cover everything from their work expectations, wage, conduct etc through to confidentiality clauses to protect both us and our clients.

How is their pricing structured?

If you are to contract a bookkeeper as opposed to employing them at an agreed hourly rate for an agreed amount of hours, how will your prospective bookkeeper charge for their time? How do they track their time so they charge you in a legal and accurate manner?
The bottom line is a bookkeeper may charge a rate of their choosing and whatever hours they feel are appropriate. Having some sort of agreement of the maximum amount of hours they will work, and at what rate, is a good idea to protect yourself.
Quite often, reputable bookkeepers will use accountancy time tracking principles of a set hourly rate at a minimum of 6-minute increments. You are then usually invoiced for their services weekly or monthly. This is how we operate at Positive Traction Bookkeeping for all new clients, and some remain on that system. Others, where we’ve established an average over a long period of time, maybe offered a set monthly charge. This means no more counting every minute worked for our client and the client never knowing quite how much the next invoice for our services will be. They’ll know it’s the same amount every month throughout the year unless reassessment is necessary due to changes in the services they require or a substantial increase in the time they require from us.

Who will own software subscriptions?

It’s not a great idea to let your bookkeeper own subscriptions for you. This is something we come across quite a bit when taking on a new client who has not been happy with their previous bookkeeper(s). The risk here is that in a dispute over an invoice for bookkeeping time, for instance, the bookkeeper can refuse to allow anybody else access to your software. If that’s your main accounting software as an example, that’s a huge problem.
At Positive Traction Bookkeeping, we highly recommend that you own your software subscription and then give your bookkeeper access to it. With all the clients we have, only 2 at the time of writing insist we own the subscription to their bookkeeping software for them. This is because they simply do not understand it or have the time to learn it. It’s not our preferred option but we will do it if it’s entirely necessary.

Contracts/Agreements

Another important consideration is having clear parameters and scope of work for any bookkeeper you contract. The agreement should cover everything from charge rate through to the duties and services expected and covered under the agreement.

Summary

All said and done, choosing a decent bookkeeper shouldn’t be a difficult task. Try to ascertain what services they need to provide to you. Ask some pertinent questions and if possible choose a bookkeeping company that gives you a legal agreement to protect both parties.