How to Spot an Imposter
As mentioned in the post about CPB’s, there are no legal standards to calling yourself a bookkeeper. So it’s sort of buyer-beware when you’re looking to hire one. We hate seeing bad bookkeeping out there in the world, so here are a few ways to tell if you’re dealing with an imposter or the real deal.
Knowledge of Accounting Concepts
Your bookkeeper should be able to “speak accounting”. But what if you don’t? How will you be able to tell? Ask your CPA. He or she will know right away if your bookkeeper is competent.
Another way to tell is to ask them to “read” your financial statements. A good bookkeeper should be able to point out some key metrics just by looking at your financials (e.g., is the business solvent? what are your margins?)
Familiar with Accounting Software
Data entry is only one component of bookkeeping. Your bookkeeper should be able to demonstrate how to use your financial data to influence business decisions with useful reporting functions.
The bookkeeper should also be using current technology and procedures. For example, most banks can be linked to QuickBooks, eliminating the need for manual entry. If your bookkeeper is manually entering transactions, they’re likely wasting your time and money.
A good independent bookkeeper has a diverse client base and uses that experience to improve his/her skill set. To get an idea of their experience, ask your bookkeeper what other industries they service, how long they have been in business, etc.
If you had to choose between a bookkeeper that held certifications/degrees and one that didn’t, why would you choose the latter? It doesn’t need to be fancy, but I would suggest requiring that at least some credible third party has certified their knowledge.
We have both experience and education, but the experience is much more important, in my opinion. You can study up on accounting concepts, but experience teaches you to adapt to different industries, procedures, technology, and personalities too!