As your business grows, you might start thinking about hiring a bookkeeper or accountant to help with the financial side of your business. Let’s first discuss what the difference is between a bookkeeper and an accountant.
A bookkeeper is someone who helps businesses or organizations keep the day-to-day finances in order by recording transactions such as, sales, refunds, invoices, purchases, expenses, and payroll. The recording of these transactions in a bookkeeping software, such as QuickBooks Online, creates financial statements using GAAP accounting rules that are programmed into the software. Bookkeepers do not need a degree or any formal training to be a bookkeeper. Bookkeepers also cannot prepare taxes unless they have experience, training, and are registered with the IRS as a paid tax preparer.
Accountants focus more on the “big picture” ensuring the financial statements created are correct by performing adjustments with complex accounting entries. Accountants have at least an associate degree, most have a bachelor’s degree; where in 4 years they learn about the different types of accounting, financial analysis, auditing and GAAP rules that all companies are to follow in the United States.
All accountants can be bookkeepers, not all bookkeepers are accountants. With these differences in mind, you may be wondering, “how can I be sure I’m hiring a good bookkeeper who isn’t going to make a mess of my financials?”
Here is a list of traits good bookkeepers have and questions to ask during an interview process on your search. If you’d like to work with us at The Entrepreneur’s Financial Group, simply book a discovery call with Olivia here.
Bookkeeper Traits:
1. Professional – They should have contracts ready for you to sign outlining clear boundaries and what their duties are. They should desire to build a strong working relationship with you through frequent and clear communication.
2. Honest – They should answer questions they only know the answers to and offer other resources to help you better understand larger problems you may be facing.
3. Proficient – Your bookkeeper should have an in-house process that allows them to complete work efficiently and in a timely manner. Having bookkeeping software is a very helpful in terms of proficiency.
4. Transparent – Nobody wants a shady bookkeeper. Their pricing and work should be crystal clear. They should offer you complete reports each month and explain transactions or journal entries you find suspicious. They should also be asking you about transactions they find unusual for your business so they can classify those transactions properly.
Bookkeeper Interview Questions:
1. How many years have you been doing bookkeeping? Look for a minimum of 5 years, minimum of 2 years if they have bachelors or higher in accounting.
2. Do you have any certifications or degrees? Look for QuickBooks certifications and degrees in accounting.
3. Do you have auditing or tax preparation experience? Having auditing and/or tax preparation experience helps ensure they know how financial statements, such as the Profit & Loss and Balance Sheet, should look at the end of each year when bookkeeping is complete and tax preparation starts.
4. What is your month-to-month process? And year-end process before taxes? When asking these questions you’re looking for a well-rounded answer that indicates they have honesty, proficiency, and transparency.
5. What is your price and onboarding process? Look for a well-rounded answer that indicates professionalism and transparency.