Keeping the books is one of those vital business tasks that doesn’t appeal to most entrepreneurs. Indeed, many are anxious to hand it off as soon as possible. For that reason, one of the first employees many small business owners hire is a bookkeeper. Bookkeepers come in all shapes and sizes, from part-time, home-based individuals to bookkeeping services. When you go to hire yours, keep these important traits in mind.
Start with honesty. Your bookkeeper will be entering deposits and checks and balancing accounts, as well as producing the very sorts of financial reports designed to reveal the existence of problems such as fraud and theft. You need to be able to trust them.
Honesty, of course, is just the beginning. Your bookkeeper should understand basic business accounting, such as types of accounts and how to produce essential reports, like the income statement, balance sheet, and cash flow statement. That’s why it’s best to seek someone with experience and the references to prove it — not a trustworthy friend or relative who lacks essential skills. Ideally, you’ll find someone with experience keeping the books for others in your industry.
It’s also vital that your bookkeeper is familiar with modern small business accounting packages. Today’s bookkeeping and financial systems are heavily automated, even for the smallest of businesses. Pen-and-ink bookkeeping sufficed for small businesses in the old days, but today your “books” had better be kept on a hard drive, not a shelf. Digital data allows for much simpler, faster, and more sophisticated analyses of your bookkeeping information.
Detail-oriented people are the best bookkeepers. In fact when it comes to making the books balance at the end of the month, only a very detail-oriented person will have the level of accuracy and precision that the task requires. Someone who wants to categorize every expense item as “miscellaneous,” for instance, isn’t going to do you much good at the end of the month.
While taking care of all those details, a good bookkeeper won’t get bogged down in them. You need to be able to count on your bookkeeper’s timely completion of critical tasks, such as bank statement reconciliation and preparation of monthly financial reports. If problems arise, you need to know that your bookkeeper will inform you in time to do something about them.
Excellent communication skills aren’t normally associated with folks who talk of debits and credits, but the best bookkeepers are more than silent number crunchers. You need to be able to explain to your bookkeeper what you want, and any problems or issues that come up should be communicated to you clearly and thoroughly.
Personality is another trait most people don’t consider when it comes to bookkeepers. But you’ll be spending plenty of time with your bookkeeper, explaining what’s going on in your business and asking questions about what the numbers show. It’s important to find someone who you can get along with and relate to.
Even while making sure your bookkeeper meets these requirements, remember that bookkeepers aren’t accountants. They don’t need to have mastered tax planning or financial analysis. No matter how good your bookkeeper, you still need an accountant to help you with these and other advanced technical tasks.
Mark Henricks writes about business, technology, personal finance, and other topics from Austin, Texas. His work has appeared in The Wall Street Journal, Entrepreneur magazine, The Washington Post, and other leading publications.