3 Key Questions to Ask Before Hiring a Bookkeeper for Your Business

In the world of business, effective money management is non-negotiable. Yet, many small business owners often grapple with the idea of hiring a bookkeeper, fearing the time and attention it might demand. However, this fear is a far cry from the tales of those who’ve navigated the treacherous path of unmanaged books, like Rebeca, a professional in the construction industry, who faced severe penalties from the CRA.

While you can handle certain financial tasks independently, such as monitoring your cash flow, it’s essential to consider enlisting the services of a qualified bookkeeper. Their expertise ensures your business’s financial records are in impeccable order, preventing potential financial pitfalls. We have ample experience rectifying well-intentioned but erroneous financial records, often mishandled by family members.

Here are some key factors to contemplate when seeking the right bookkeeper for your small business:

1. Are They Registered?

Hiring unregistered accountants or professionals can lead to substantial penalties for business owners. Accountants must possess an active certificate filed with their province’s division of corporations or similar government office, making their information accessible in a public online database. You can find such directories on platforms like the CPABC website. While databases are reliable, verifying your potential bookkeeper’s background through sources like LinkedIn or Google reviews is prudent.

2. Do They Have the Right Credentials?

Ensuring your bookkeeper holds the necessary certifications is vital. Trust in their work is paramount; during an audit, if it’s revealed that your books were not managed by a qualified individual, your business could be at risk. While the CPA designation is widely recognized, many CPAs also attain Certified Bookkeeper (CBA) status after rigorous training. Some regions necessitate bookkeepers to be licensed or registered. Moreover, explore organizations offering certifications specific to bookkeeping or accounting, such as those for QuickBooks users.

3. Check Prior Experience

The best bookkeepers may not necessarily have an accounting background but should possess practical experience in the tasks you need them to manage. If you require expertise in software like QuickBooks or have specialized industry needs, look for candidates with relevant prior experience. Assessing varied skill sets, education, and backgrounds is crucial. Conducting in-person meetings or Zoom calls can provide insights into their communication skills, important for financial matters.

Consequences of Hiring a Bad Bookkeeper

A competent bookkeeper can enhance efficiency and profitability, while an incompetent one can wreak havoc on your business and personal life. Underreporting income can lead to CRA penalties, missed tax deadlines may trigger audits, and mishandled finances can result in business license suspension, property liens, bankruptcy, and legal repercussions. To avoid such misfortunes, it’s crucial to find a reliable bookkeeper.

Finding the ideal bookkeeper is a critical task, as they play a pivotal role in your business’s financial health. To make this process easier, here are four valuable tips:

• Transparency: Ensure their website clearly details services and pricing.
• Client Reviews: Seek out Google reviews and testimonials from previous clients to gauge their expertise.
• References: Contact past clients directly for references.
• Industry Specialization: Opt for a bookkeeper with experience in your specific industry, offering familiarity with industry-specific financial nuances.

Locating the right bookkeeper may demand effort, but the reward of streamlined financial management and peace of mind makes it all worthwhile.