A bookkeeper is a bit like a GP – there’s one on every corner but great ones are hard to find but when you find a great one you never let them go. But how do you know if your bookkeeper is a good bookkeeper or even better a great bookkeeper? Well let’s start with what every bookkeeper should be so we get the basics right then look at what makes a bookkeeper a great bookkeeper.
Every bookkeeper should have some sort of formal bookkeeper or accounting training and preferably be a registered BAS Agent. A registered BAS agent means that the Tax Practitioners Board are satisfied that the bookkeeper has the required skills, qualifications and a minimum amount of experience to correctly account for GST and prepare your BAS according to legislation. To check if your bookkeeper is registered click here.
Once you know they have the basics covered then comes the tricky bit working out the differences between one bookkeeper and another. Judging bookkeepers by price is fraught with danger but as with most professionals the less experienced, less qualified bookkeeper will usually be cheaper so if you’re simply comparing hourly rates a highly experienced bookkeeper will always seem more expensive. However this is false economy because they key is that the more experienced bookkeeper will also work significantly faster and smarter than someone who has less experience. An example of this happened to one of my clients recently. He was paying his previous bookkeeper almost half of my rates but she charged him 16 hours a quarter to do his work. When he came to me he almost fell over when I told him our prices however when I did his work it took me 4 hours in total – so yes my rate was almost double but his bill was less than half.
So qualifications and registrations tell you that you have a competent bookkeeper, price will give you a guide as to whether you have a good bookkeeper but honestly if you want to focus on kicking some serious business butt and not worry about your bookkeeping ‘good’ isn’t good enough – you want and need a ‘great’ bookkeeper.
A great bookkeeper will do more than just get you over the line with your compliance they will –
1. Take the time to really understand your business and how you operate so they can make sure that the processes are as simple and efficient as possible and things aren’t being missed or processes duplicated unnecessarily. They will be able to use some of their experience and if they see areas that can be streamlined they will let you know.
2. Ask questions – many business owners find questions annoying however in order to ensure transactions are correctly allocated it is better that your bookkeeper ask rather than guess. I have an IT client whose bookkeeper had allocated computer purchases to Computer Equipment in the balance sheet rather than hardware purchases in Cost of Goods Sold so for months they thought their profit figures were really great until the Accountant went to do their tax return and asked about all the asset purchases which weren’t asset purchases at all and then had to be reallocated to purchases in their Profit & Loss. If only she had asked.
3. A great bookkeeper knows what they don’t know. Not only do they know what is legally within their scope (e.g. BAS Agents are not permitted to give any income tax or FBT advice) but they are also not afraid to say I don’t know if they don’t know something rather than worry about looking silly and will contact your Accountant for advice.
4. A sign of a really great bookkeeper is one who is up to date on what is happening in the bookkeeping, accounting and technology spaces. With rapidly changing technology the bookkeeping and accounting industries have changed considerably over the past few years. Your bookkeeper should be explaining and encouraging you to use technology to speed up and automate processes utilising cloud accounting packages like MYOB Essentials or MYOB AccountRight and their features such as bank feeds and mobile invoicing. Recent industry surveys show that the small business owner can save on average more than 10 hours a month just by using bank feeds – personally I think that figure is on the low side and could easily be doubled.
5. Finally, the relationship between client and bookkeeper is a sacred and by this I mean that most people don’t share their financials with friends or even family yet this person is privy to everything – especially if you are using the one account for business and personal but that is another article altogether. Make sure you like your bookkeeper, that you trust them and feel comfortable being completely honest with them. Your bookkeeper cannot assist you get the most out of your accounts if you are not being completely transparent with them.