Why should you have the right Bookkeeper?

So many may ask why exactly is it such a big deal about bookkeeping, I mean basically all you need is someone to come in and do a little data entry, and make sure your debits and credits are accounted for right? Wrong!!

You need to be aware of who you hire as a bookkeeper ,make sure they are the right person and have more than just working knowledge of your accounting systems, such as QuickBooks. Why am I so concerned about assuring you hire the right bookkeeper? Well there are 2 major reasons:

Unexpected Time & Money: If you do not hire the correct person to set up and maintain your financial records, you can end up with very costly errors. The most important things can be overlooked, laws can be broken and the reason for initially hiring someone to assist you is now blurred.

Bookkeeping should be seen just like the job of a teacher, it required constant education, focus, patience and understanding. A Bookkeeper should have references, qualifications and proof of ability. When hiring a Bookkeeper you are going to get what you pay for and quantity doesn’t always equal quality. Acquiring the right Bookkeeper will cost you somewhere in the midst of $18-$45 an hour if they are not affiliated with a CPA firm, if affiliated with a CPA firm you are looking at $75 and up per hour. There are some valuable Bookkeepers that could possibly be hired at a rate lower than the average but they are very few, as most Bookkeepers know their worth.

Many (so called) “bookkeepers” are claiming they have many, many years experience working in an office environment, paying the bills and collected the monies owed to the company. But in reality, just putting in a creating a check out of the system or taking a payment from a customer does not constitute you as a Bookkeeper, this just means they can process a data entry function. The real question is, “Do they know that if you create a credit from here it could cause a debit there?” Or that reconciliation of credit cards and bank accounts are sure way of missing on money made or money paid? Or do they know about what the Sales Tax rules are for your industry? Or what consists of a COGS (cost of goods sold) account, and where that should be in a P & L (profit and loss) Statement?

If the Bookkeeper or Office team member that maintains your financial records misses any minute detail in their accounting of debits or credits, or deletes an entry in the general ledger, doesn’t reconcile your credit cards or bank accounts, or creates journal entries to hide mistakes this could drive the cost of your CPA fees during tax time to go up by 30-50%, it could cost you several months of corrections, findings and auditing which depending on the cost of your CPA’s bookkeepers or an outsource could costs you almost as much as half the yearly salary or subcontracted wages you initially spent. Now your time is no longer focused on your businesses day to day functions, its now all in focused on looking up invoices completed last February, or remembering what charge was in this credit card or researching whether or not you overpaid or underpaid.

The right Bookkeeper will be able to not only assist you in the day to day financial transactions, but she/he should also be able to implement internal control processes to assists in the organization, education and continual growth of your business. Your Bookkeeper should allow you to run your business not your business run you.

Just remember that saving a few dollars now could cost you thousands of dollars later and the once place you should not want to cut corners on is you’re the financial responsibility of your business.