What constitutes a qualified bookkeeper? Is it their experience, technical savvy, processes, or maybe their mission and values? Perhaps, it is as simple as what they charge (HINT: this is NOT how you choose a provider). I often talk and work with business owners on this very subject. How do they know, trust, or even, where to start to look for a qualified bookkeeper? How do they identify individuals that “know their stuff” or find a trusted partner in handling their business finances? This is a big leap of faith, often requiring an immediate trust factor. We have blogged about the horror stories of improperly trained bookkeepers who either destroyed somebody’s books or even stepped over the line and embezzled. It all dials down to three key factors, and frankly, it has nothing to do with money.
1. Experience Factor – Accounting, Tools, Industry, Business
If you were hiring an employee you would have a resume, list of references, and you may even have them do a skills test or personality profile. So what is different when you outsource to a contractor compared to an employee? It is all about the experience factor and whether you choose to hire an experienced contractor or someone with a basic set of skills.
- Basic skill set requires that you bring the guidance, training, process, and supervise – aka an employee in a contractor suit. Rates for this skill set are on the lower end and tend to be based on time rather than value. If you want to start with “training” I would recommend a skills test for this level so you know what you are starting with. There are simple free tests (like this one from AIPB) but I prefer the Sleeter test which incorporates bookkeeping and QuickBooks, it’s not free, but worth the time and cost.
- Experienced skill set will bring you the answers and be a step above you in your knowledge base. Rates for this skill set will be on the higher end and may be value or packaged priced rather a flat hourly rate. You tend to hire this level for their specific experience, skill, or knowledge which results in an immediate ROI.
Here are items that can help fact check that experience factor.
- References. Some bookkeepers may be a little put-of by this request as they feel that is only acceptable in an employee relationship. Just as you would ask to see a graphic designer portfolio you will need to “see” the work of the person you are hiring. Since taking a deep dive into the bookkeeper client records would be a no-no, at least speaking to them about their experience is not outside of the box of hiring a contractor. More than likely the bookkeeper hasn’t asked their clients for a reference before, or if they are new to business, they may not have any contacts for you to connect with.
- Time. How long have they been in business? What did they do before starting their own business? You are looking to determine the extent they have been in the accounting industry. Have they gone to school or gotten a degree? A solid book understanding of accounting is your best option here. No matter what the technology is, if a bookkeeper has a firm understanding of the accounting cycle, debit/credits, and reporting, they will be able to pick-up the rest.
- Industry. With what industries have they worked? Bookkeepers with similar industry experience as yours will be able to step in and get up to speed faster than someone that doesn’t have that same experience. They will know the vendors, terminology, and they may even be able to bring some extra value to the table with business processes or general practices.
- Technology. Just knowing accounting technology does not mean they have the bookkeeping smarts. It does mean they know the software, so looking for certifications does help if you want someone experienced in the tool you wish to use. For example, your accounting tool needs a lot of clean-up and support. Hiring a certified expert in that tool, plus solid industry and time experience, may make that software conversion or cleanup a breeze rather than another disaster.
2. Know, Like & Trust Factor (aka KLT)
There is no test for KLT, but you will know: you just need to check in with your gut. If you aren’t feeling it, trust your intuition and walk away! Ask trusted colleagues for referrals, and review why they are able to make the referral. Just because you met someone at a networking event doesn’t mean they passed the KLT factor, it just means you are aware of them. Take an extra step to review their website and LinkedIn profile. Do you like what they are saying, commenting on, or even following?
A bookkeeper can also encourage trust by doing the following:
- Creating, documenting, and sharing the process they use. This includes who is responsible for what and when to expect it (part of a good communication plan).
- Carrying insurance. Professional Liability Insurance is the basic coverage to look for in bookkeeping. If they have a team, then they will have a Businessowners Policy with an Employment Practice coverage. A bookkeeper just starting out may not opt to have this additional cost. An experienced bookkeeper will view this coverage as a way of offering a level of comfort and security to their clients.
- They have a clear division of duties. Look for a provider that wants you to be part of the process. The idea of drop/run management style of your company finances will set you up for failure. It is your business, be in the know about what is being done.
- Using a read-only access to your bank accounts. This may be problematic with some banks, which is why there are tools like Hubdoc that allow you to provide the access a bookkeeper needs without giving them full access to your banking. No matter how trustworthy they may seem, allowing someone else full access to your banking is not part of a sane security practice.
- Providing an onboarding process. Do you feel heard? Are they taking care of your needs? Are they being responsive? Ask for a documented onboarding process and outline the best communication needs for you during that period.
- Having similar values & mission. Looking for a bookkeeper that has similar values means you talk the same language. It also means they hold themselves and their business to a different level of professionalism.
3. Communication Factor – how, when, best ways
Knowing when your work will be addressed; how best to get a hold of them; and when to expect communication; is the difference between having confidence in the process and spending your time micro managing the situation. Take the time to ask about their needs and be clear on your own needs. Example: if you are looking for a bookkeeper to update your activity every day, it would be helpful to communicate that at the beginning of the project rather than after you are annoyed and frustrated because it was only done twice per week.
So you know when, how, and the best way to reach them, but do they speak the same financial language as you do? People are drawn to the accounting professional because they are more data-oriented rather than people-oriented. That translates into the language they will use: first they will rely on the data to prove something, and they will move at a slower pace to verify that information. An ideal accounting professional is precise, accurate, detail oriented, and interested in analyzing the data. However, with that comes a different level of communication. The more you know about your own communication needs and style, the easier it will be to recognize the differences and uniqueness in your bookkeepers style. Having a clear communication plan will ease these differences and help the KLT factor as well.
I started my practice in 2001. During the last 14 years, I have spent time being that sole proprietor home-based business; for the last five years I have had commercial space and been working with a team to manage our client finances. So yes, I know exactly what it is like in all of these three areas at both ends of the spectrum.
The ADI Accounting Team is experienced in both their book knowledge, industry specific niche, certification in tools, and time invested in the accounting industry. We take the time required to build the KLT factor with you by creating a documented accounting process and communication plan for each client, investing in the insurance coverage listed above, and encouraging our clients to have security top of mind in sharing their financial data.
The added value, that cherry on the top, is ME. I bring to every client conversation actual business ownership growth experience, past work experience in public accounting in business taxes, and a gift of looking beyond the financial box to the complete health and longevity of a business. I bridge the gap between the high compliant finance team and the result oriented business owner, entrepreneur, and visionary. Our success is YOU reaching your finance and business targets. We won’t be the cheapest, but I guarantee you will get more from us than just the numbers.
Do you have a question about next steps? Start with our consultation page here : that will lead you to my online calendar tool. If you need more info leave us a comment below. I look forward to continuing the conversation.