Four Steps to Take Before Hiring a Bookkeeper | Fora Financial Blog
Four Steps to Take Before Hiring a Bookkeeper
May 30, 2017

Four Steps to Take Before Hiring a Bookkeeper

Handling your business’s finances can be challenging, since you likely have a variety of other responsibilities to tend to. Therefore, it may make sense to hire a professional bookkeeper. You may not have enough time to manage your business’s daily finances, or perhaps bookkeeping isn’t a skill that you possess.

Regardless of your reasons for wanting one, hiring a bookkeeper can be a responsible step to take, so that someone always has their eye on your business’s financial needs.

Still, hiring a bookkeeper is no easy task. This person will have access to intimate details of your company’s financial records. They will have the ability to view account balances or statements, which will be necessary for them to reconcile accounts on a regular basis. In addition, they may even have signing authority for one or more of your accounts – should you grant them that ability. Due to these factors, you need to be able to guarantee that this individual is trustworthy and can responsibly handle your business’s finances.

Additionally, a hired bookkeeper will play a role in any audits that your business undergoes either from regulators or your own auditing firm. Auditors, in addition to checking cash flow and confirming checks issued/received, will often ask firm principals a series of control questions to determine who has control of accounts. They will need to know what these individuals have the authority to do, and what kind of risk they pose to the business (which can include fraud, malfeasance or simple accounting errors).

It is important to understand that a bookkeeper will have access to sensitive information and could manipulate your firm’s private financial data. Due to this, you should ask crucial questions prior to hiring them. Certain steps should be taken, in addition to an interview, to ensure that they are an honest person that is fit for the job. Here are four steps you should take prior to hiring your bookkeeper:

1. Determine their familiarity with various bookkeeping software systems: When you recruit a bookkeeper, you are hiring them for their knowledge and skills. While some on-the-job training will be required to teach them the specifics of your business, this is not an entry-level position. They may not be familiar with the specific software that you use, but knowledge of some bookkeeping or accounting system will mean they have baseline understanding that can be developed to fit your needs. Lack of familiarity with any industry software should be a sign that they are unqualified.

2. Run a background check: This may seem like an unnecessary expense or inconvenience, but running a background check is a step that you should take. Even if you’re hiring a friend to help with your books, make sure that their background doesn’t raise any red flags. This is especially essential if you think you may give your bookkeeper authority to sign checks or issue payments online. Failure to run a simple background check is doing your business and its stakeholders a major disservice.

3. Ask for references: You’ll want to confirm that your potential bookkeeper has reputable work history and has acted with integrity in previous positions. Do not simply take their word for it – check with previous employers, supervisors or clients. Confirm both experience and character in the workplace, so that you get an idea of what this person is like as a colleague.

4. Run a credit check: If you are going to hire someone to help manage your business’s finances, you should check to see that they manage their own finances responsibly. Pay special attention to whether they have previously filed for bankruptcy or defaulted on a loan. This kind of behavior can indicate a pattern of irresponsibility regarding finances that you do not want anywhere near your business.

A bookkeeper may seem like a relatively straightforward hire, but you should be thorough during your recruitment process. When hiring a bookkeeper, you should ensure that you find someone who is authentic, acts with integrity, has a clear comprehension of finance and accounting tools and has demonstrated a pattern of working responsibly with money.

Hiring the wrong person can quickly mean the end of the business that you have worked so hard to build, but finding the right candidate can translate to renewed growth in your business and fewer worries going forward.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Irena Mckenzie is a Castle Hill local and is a very experienced mobile bookkeeper and successful small business owner. She has years of experience in all facets of bookkeeping and office work. She has run various small businesses for many years and understands exactly what it takes to get a small business up and running at full speed.