While the majority of small business owners consider hiring a bookkeeper an essential step, it is vital for their business because without professional help one may not be aware of the current financial condition of their firm. Poor or untimely bookkeeping causes the loss of important deductions, problems with money management and stress during tax season.
However, choosing an appropriate candidate for the position of a bookkeeper may become a difficult process, which cannot be done by posting the job offer and employing the candidate who sends the first resume. The following article will introduce you to what small business owners should know about hiring a bookkeeper for small businesses.
Why Hiring a Bookkeeper Matters for Small Businesses in the USA
All small businesses continuously produce financial information — from invoices to receipts, payroll processing to vendor payments — and such information should be kept well-organized for any use. Poor bookkeeping leaves business owners without an idea of their profits, and the only thing accountants have left to do is waste valuable time on record keeping.
The Real Cost of Delayed or Inaccurate Books
When accounting becomes delayed, small mistakes can become big problems very fast. An invoice not being entered, an incorrectly classified expense, and suddenly, by the end of the year, the books are not accurate anymore. This problem is usually realized after having the accountant look through your accounting system to prepare your taxes, at which point cleaning up the mess will take much more time than simply doing the work on time. Another common realization many owners make, too late, is how their messy books kept them from getting a loan.
How a Bookkeeper in USA Supports Compliance and Cash Flow
A professional bookkeeper in USA has knowledge about the tax filing deadlines at the federal and state level, requirements regarding payroll tax, and the accounting record standards expected by the IRS. In addition, the accuracy of the books provides the owner with up-to-date information on the cash flow, which impacts business decisions such as staffing and purchasing.
Why This Decision Deserves More Than a Quick Hire
Since bookkeepers have access to confidential financial information and play a critical part in ensuring taxes are accurate, this is not a position to take up on the spur of the moment. The process should be given the same consideration owners would give when filling positions that have anything to do with money and legalities. That is precisely the reason that successful business owners consider the selection of a bookkeeper as more than just an administrative chore.
How to Hire a Bookkeeper for Small Business Operations
After realizing that there is a need for accurate bookkeeping, the issue becomes determining how to staff this position. This will determine the costs, flexibility, and level of integration of the bookkeeper into the organization.
Defining the Scope of Work Before You Search
Scope of work needs to be clearly established prior to reaching out to any prospective candidates for the job. This includes activities that will be expected from the individual like reconciliation of bank accounts, payment processing, payroll processing or accounting related activities. Defining the scope of work helps tremendously in evaluating candidates as well as avoiding any change of scope of work once the candidate is selected.
In-House, Freelance, or Outsourced: Choosing a Structure
If businesses decide to hire a bookkeeper for small business needs, they will have to decide among themselves whether they want to employ someone part-time or find an individual freelance bookkeeper or outsource their bookkeeping needs to a bookkeeping firm. The difference will be in the costs incurred and the amount of control that one will need to exercise over their transaction needs. However, regardless of the choice that a firm decides to make, it will be crucial to work with a bookkeeper in USA.
Evaluating Experience With Your Industry and Software
Not all bookkeeping experience is transferable across various industries. For instance, one who has experience using the inventory systems in retail will require some time before he/she learns the service-oriented billing systems. Moreover, it is important to ensure that the potential employee is familiar with the software that the firm has already been using, since it takes additional time to train him/her in the use of another software system.
Checking Credentials, References, and Track Record
A QuickBooks ProAdvisor certification or even experience within an established bookkeeping professional organization adds credibility to the situation, but experience and references can be equally, if not more, important. Asking previous clients or employers about accuracy and communication style can give far more insight into whether or not the person is reliable. It is also a good idea to ask the candidate what he did about a mistake or discrepancy in his work in the past, as that is an excellent indicator of dependability.
Where to Find a Reliable Bookkeeper for Hire in the USA
Having understood the focus and structure of your search process, the actual search will become easier. Entrepreneurs have several legitimate ways to look for information, each fitting a particular need and budget.
Searching Through Professional Bookkeeping Networks
Networking groups such as the American Institute of Professional Bookkeepers have directories that can be used to find a qualified bookkeeper for hire in your neighborhood or in your field of expertise. The networking group is helpful since membership in the organization is usually based on professionalism.
Asking for Referrals From Your CPA or Peers
It is advisable that you look for someone that your firm’s existing CPA or tax preparer can recommend. This is because they know the people whose services they have used before. Referral from other owners of small businesses within a similar industry is also helpful.
Considering Outsourced Bookkeeping Firms for Scalability
In case a firm is planning to grow, outsourcing their accounting can prove to be better for the firm than employing one accountant. This is because the volume of work can grow without the firm having to go through a recruitment process each time the load increases. In addition to this, the likelihood of disruption in the event that one person is unable to continue the job is minimized.
Vetting Candidates Found Through Online Platforms
However, using freelance marketplaces or job boards expands the talent pool dramatically, yet at the same time makes the task of the business owner even more challenging since he or she must carefully check the applicant’s work history, ask for the completion of a short trial project paid by the employer, and verify the references provided. In any case, asking for a work sample of a prospective bookkeeper will not hurt.
What to Look for Before Finalizing Your Bookkeeper Hire
Though after filtering out the potential partners, there are certain steps which would ensure that the relationship remains strong and avoids another search a few months later.
Communication Style and Responsiveness
Bookkeeping only becomes valuable if there is timely receipt of financial information by the business owner. While carrying out interviews of the candidates, owners need to ask how frequent the updates are, how they respond to emergencies, and how quick they are in carrying out monthly reconciliations.
Data Security and Confidentiality Practices
Since the job involves handling highly confidential information in terms of finance and banking, the owner must check on how the potential bookkeepers handle their data, whether they have an accounting system on the cloud, and if they are prepared to sign a confidentiality agreement.
Pricing Structure and Contract Clarity
Before reaching any kind of arrangement, the owner must clearly know about the deliverables involved in the quoted rate, whether it is limited to reconciliations alone, or if it involves reporting, payroll processing, and year-end tax filing coordination. An agreement in writing of the deliverables will ensure that there are no misunderstandings in the beginning of the working relationship.
Starting With a Trial Period Before Committing Long-Term
The use of an initial trial period of one or two months has proved helpful for many small firms before making a commitment to a long-term plan. It serves as a good way for both sides to test whether the collaboration will work without having to worry about giving out large amounts of financial information. The trial period allows the owner to observe personally how the potential worker deals with issues of deadline, follow-ups, and other unforeseen circumstances.
Hiring a bookkeeper ranks among the significant decisions that one needs to make as a small business owner because this decision has a direct bearing on their financial clarity, tax efficiency, and the amount of time they spend trying to understand the records instead of operating the business. It makes perfect sense to take enough time to clarify the parameters and conduct due diligence on the candidates via credible sources so as to gain more from the process than losing through hasty decision-making.
Work with The Fino Partners, an outsourcing partner who is renowned for helping small businesses get empowered by offering bookkeeping services based on your business type and phase of development. Contact us today to get a bookkeeping package that suits your business and not vice versa.
