Think Like A CEO: 8 Questions To Ask Your Bookkeeper

cash flow financial best practices planning Sep 05, 2022


A few things in life are certain: death, taxes, and the importance of a good bookkeeper for your business.

However, you should be aware that there is no industry standard for bookkeeping. Moreover, bookkeepers are not required to hold a certain degree, license, or even certification. In fact, many bookkeepers' education hasn't surpassed a high school diploma. And there is nothing wrong with that! I know many highly educated people who are quick to tell everyone that they learned the most important aspects of their career on the job. However, there are optional certifications and licensing courses a bookkeeper can hold.

With all that said, you still want to make sure your bookkeeper understands your expectations. Furthermore, you want to ensure they are both willing and able to meet your expectations. Otherwise, you could risk your business’s credibility, jeopardize cash flow, and face possible fines and penalties when tax season rolls around.

I’ve put together a list of questions to ask your bookkeeper so that you can set your business and its relationship with your bookkeeper up for success.


8 Questions To Ask Your Bookkeeper To Define Expectations For Your Small Business

Whether you’re interviewing potential bookkeepers or already have one on the payroll, it’s better for everyone involved to define expectations. Plus, by getting the hard questions out of the way, you can deepen your partnership and your bookkeeper’s commitment to your business.

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1. What Is Your Bookkeeping Experience, Including Your Previous Primary Responsibilities?

Your bookkeeper’s career experience is incredibly relevant to your interview process. Ask them to explain their experience and what responsibilities they’ve handled in past positions.

This doesn’t necessarily mean they can’t adapt to your business’s way of doing things. But knowing their experience and what responsibilities they’ve handled will help you develop a realistic workflow plan.


2. Can You Explain Basic Bookkeeping & Accounting Terms?

The best way to learn about a bookkeeper’s understanding of bookkeeping and accounting is to ask them to explain. At the very least, they should have a basic understanding of bookkeeping and accounting terms, familiarity with Generally Accepted Accounting Principles (GAAP) and understand how to read financial statements. 

In addition, your bookkeeper should understand how to assist you in areas like accounts receivable, accounts payable, and account reconciliations. If your business carries inventory, then make sure they have the appropriate background to help you.


3. Are You Computer Savvy?

Computer literacy is a must have for your bookkeeping services. The benefits of using the right bookkeeping software for your business include:

  •  Eliminate or minimize human error
  •  Increase productivity with automations
  •  Run quality reports to track progress, reconcile accounts, and pay taxes
  •  Stay in compliance with any required regulations

To get a good idea of your bookkeeper’s computer savviness, ask questions like these:

  •  What accounting software are you most familiar with?
  •  How have you helped other companies increase revenue, save time, and reduce expenses?
  •  What financial report preparation have you been responsible for?
  •  What is your knowledge of my industry’s federal, state, and local legal compliance requirements and regulations?

The weight that your bookkeeper’s answers hold will likely depend on your training resources. For instance, if you have the time to teach them or enroll them in training for your software, then it doesn’t matter so much if they’re familiar with your software and other areas of your business.

However, if you need a bookkeeper to come in and hit the ground running, make sure to screen them appropriately.

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4. How Would You Gauge Your Familiarity With My Industry?

While many small businesses across different industries have similar bookkeeping fundamentals, they are not all the same. There are different terms and insider aspects across industries. Often, a bookkeeper can only learn this type of information on the job.

Once again, the weight this answer holds depends on how much time you are willing to dedicate to training. However, hiring someone with industry experience will put everyone involved ahead of the learning curve. Moreover, they are likely to help improve your systems and processes if they already have a general understanding of your industry.


5. Do You Find It Easy To Ask For Help & Provide Clarification When Needed?

Whether or not your bookkeeper has experience with your industry or accounting software, their ability to effectively communicate is extremely important.

Keep in mind that it’s your business’s finances at stake. If your bookkeeper does not feel comfortable asking for help or clarification when needed, then your books may end up in a messy situation.

Furthermore, healthy communication can also benefit your understanding of your business’s financials. For instance, your bookkeeper may be able to clarify finance questions on your end if you’re feeling lost. Overall, communication is key and a lack of communication with your bookkeeper can be a business killer.


6. How Often Do You Pursue Continuing Education For Your Career?

Although bookkeeping does not require a license or certification, that doesn’t mean that the options for continuing education should be ignored.

You can gauge a bookkeeper’s dedication to their career through their interest and willingness to pursue continuing education opportunities. Whether through their own research or taking classes, you want a bookkeeper who is dedicated to enhancing their skills and staying abreast of the accounting skills your business needs.


7. What Is Your Understanding Of Job Costing?

Are you tracking the cost of each individual project and job your business performs? Whether you run a hair salon, construction company, marketing agency, or something entirely different, you need to track job costing.

This allows you to see the true cost of each project you undertake in terms of labor, materials, and overhead. Job costing allows you to price your products and services properly and ensures your time and money is spent wisely.

If your bookkeeper has a good understanding of job costing, they can help you gather the right data to run the metrics you need.


8. Are You The Type Of Person Who Always Follows Through With Attention To Detail?

You didn’t decide to bring in a bookkeeper to be their babysitter. This is why you want a bookkeeper who will uphold their responsibilities with attention to detail all the way through the completion of each task.

For example, you will likely want financial statements like balance sheets, P&L, and cash flow completed by the 10th of every month. But you also want to focus on your own busy schedule. So you need to be able to have confidence in your bookkeeper to handle their own duties. While you should be available if they need assistance, your bookkeeper needs to take charge of their financial projects.


Get Connected To The Right Financial Resources With Harrington Strategic Partners

Hiring the right bookkeeper is one step in ensuring the financial success of your small business. However, the two of you should reconcile your books together on a regular schedule.

With the right financial data documented, an outsourced CFO will have the information to help you make the best decisions for your business. Whether that’s implementing more cost-cutting measures, cash flow strategies, or deciding when it’s time to scale – your CFO can work a lot more efficiently if your bookkeeper is doing the same.

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