Hiring the right bookkeeper is a crucial step for any business, big or small. A bookkeeper’s role is fundamental in managing your financial records and ensuring your business’s financial health. This guide will walk you through the key considerations in how to hire a bookkeeper, from understanding your business needs to evaluating candidates’ skills and certifications, and deciding on pay rates.
Before you begin your search, clearly define the specific bookkeeping tasks required for your business. Consider the following:
- Types of Services Needed: Identify if you need assistance with payroll, invoicing, bank reconciliation, or financial reporting.
- Volume of Transactions: Assess the complexity and volume of your financial transactions to determine the level of expertise required.
- Growth Stage: A startup may need different services compared to a well-established business.
- Software Preferences: Determine if you need a bookkeeper proficient in specific accounting software like QuickBooks, Xero, or Sage.
Look for Relevant Experience
Experience is crucial in selecting a bookkeeper. Consider:
- Industry Knowledge: A bookkeeper familiar with your specific industry will understand its unique challenges and regulations, enhancing their effectiveness.
- Years of Experience: Look for candidates with a proven track record in bookkeeping. Ask for references and speak with previous clients about their experiences.
Verify Qualifications and Credentials
Ensure that potential candidates possess the necessary qualifications:
- Certifications: Look for certifications such as Certified Public Bookkeeper (CPB) or Certified Bookkeeper (CB) from reputable organizations like the American Institute of Professional Bookkeepers (AIPB) or the National Association of Certified Public Bookkeepers (NACPB). mandatory.
Assess Software Proficiency
Ensure that the bookkeeper is proficient in the accounting software your business uses, such as QuickBooks, Xero, or FreshBooks. Familiarity with these tools will facilitate a smoother onboarding process.
Evaluate Communication and Organizational Skills
Effective communication is essential for a successful working relationship. Look for candidates who can clearly convey financial information and are responsive to queries. Additionally, assess their organizational skills during interviews to ensure they can manage your financial records efficiently.
Conduct Interviews and Assess Compatibility
Interview multiple candidates to gauge their skills and cultural fit within your organization. Prepare questions that explore their problem-solving abilities, experience with specific tasks, and how they handle discrepancies in financial records.
- Trial Period: Consider starting with a trial period to evaluate their performance in real-time.
Check References and Background
Request references from previous employers to verify work history and performance. Conduct background checks to ensure trustworthiness, especially since bookkeepers handle sensitive financial information.
Discuss Cost and Value
While cost is an important factor, it should not be the sole determinant. Evaluate:
- Fee Structure: Understand their pricing model—hourly, flat rate, or retainer—and what services are included in their fees.
- Return on Investment: A skilled bookkeeper can save you money by identifying tax deductions and ensuring compliance with regulations.
Finalize Terms and Onboard
Once you have selected a candidate, negotiate the terms of employment or contract clearly outlining responsibilities, pay rate, and working hours. Provide them access to necessary financial systems and introduce them to your team for a smooth transition.
Full-time vs. Freelance Bookkeeping
Choosing between a full-time and freelance bookkeeper depends on your business size and financial activities.
Freelance Bookkeepers
Freelance bookkeepers are a good choice for small businesses and individual needs. Small businesses usually don’t have many financial transactions, so hiring a freelance bookkeeper is sufficient to manage their money matters. This way, small businesses save money because they don’t need a full-time bookkeeper.
Full-time Bookkeepers
Big companies with extensive financial activities might need a full-time bookkeeper. Sometimes, if the company is large or has multiple locations, they might need more than one full-time bookkeeper. Although freelance bookkeepers charge by the hour and might seem cheaper, for big companies, this can end up costing more. That’s because big companies have a lot of work for bookkeepers, and paying a freelancer for all that work can be more expensive than having a full-time employee.
Skills to Look for in a Great Bookkeeper
An ideal candidate for a bookkeeper position should possess a combination of specific skills and attributes, along with relevant work experience, including:
- Formal training in bookkeeping, either through a recognized certification program or through practical experience gained in previous bookkeeping roles.
- Proficiency in QuickBooks, demonstrating the ability to efficiently manage financial data using this popular software.
- Strong skills in using Excel, essential for organizing financial information, performing calculations, and preparing reports.
- An exceptional eye for detail, crucial for ensuring accuracy in financial record-keeping.
- A well-developed sense of organization, enabling effective management of multiple tasks and maintenance of orderly financial records.
- Outstanding communication abilities, both verbally and in writing, necessary for explaining financial concepts clearly and preparing comprehensive reports.
Consider Accounting Firms for Your Business
Outsourcing bookkeeping to an accounting firm is a smart move for any business looking to streamline its financial management. It’s cost-effective, saving you the expenses and complexities of hiring a full-time employee. You gain access to a team of experts, ensuring top-notch financial handling and compliance with the latest regulations. This move frees up your time to focus on core business activities, driving growth and efficiency. Plus, with an accounting firm, you get scalable services tailored to your business’s evolving needs, along with robust data security. In short, it’s a strategic decision that offers peace of mind, professional expertise, and a clear path to better financial health for your business.
At XOA TAX, we have a team of dedicated CPAs who have years of experience helping clients from various industries such as e-commerce, construction, dentistry, chiropractic, real estate, pharmacy, non-profit, and more. Focus on growing your business, leave your records to us.
Decide on Bookkeeper Pay Rates
When planning to hire a bookkeeper, it’s crucial to determine their salary in advance. Including this in your job advertisement can not only draw in more qualified applicants but may also be a legal requirement. The salary you decide on will depend on various factors, such as the location of your company, the level of experience you require, whether the bookkeeper will be a contractor or an employee, and the industry your business operates in.
According to the Bureau of Labor Statistics (BLS), the average annual salary for a full-time bookkeeper in 2022 was about $45,000. However, bookkeeper salaries can range significantly, from around $30,000 to over $65,000. This variation is influenced by specific factors like your industry, the bookkeeper’s experience, the particular requirements of your business, and the geographical location of your company.
How are Bookkeepers Different from Accountants?
Bookkeepers handle the daily financial record-keeping of a business, such as tracking receipts, invoices, and other transactions. Accountants, however, provide deeper business insights based on this information, tackling complex tasks like creating financial statements and managing tax filings. While bookkeepers maintain the financial data, accountants analyze and interpret this data for higher-level business decisions. For a more detailed explanation of the differences between bookkeeping and accounting, and how each can benefit your business, check out the article Understanding the Difference Between Bookkeeping and Accounting.
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