Bookkeeping can be a complex task. Because bookkeeping involves keeping records of all your financial transactions, as your business grows, bookkeeping only becomes increasingly complex Luckily, this may not be a task you have to manage yourself. In the early stages of growing your business, you may have to handle your own bookkeeping, but ideally, you’ll reach a stage in which you can justify hiring a bookkeeper to provide this service. We have come up with 10 critical questions to ask a bookkeeping service before hiring.
The Role of a Bookkeeping Service
Proper bookkeeping ensures a business’s financial records are sound, thorough, and accurate at all times. Thus, a quality bookkeeping service could offer the following benefits:
- Sufficient financial data to help you make informed business decisions
- Assistance with tax law compliance
- Assistance in identifying areas with growth potential, as well as areas where your business may be spending or otherwise losing money excessively
A bookkeeping service also offers another critical benefit: time. When you hire professionals to handle your bookkeeping needs, you have more bandwidth to focus on other aspects of growing your business.
The Importance of Due Diligence
It’s important to vet your options thoroughly when deciding who to hire. Doing so doesn’t merely help you identify bookkeepers who genuinely offer quality service—it can also help you avoid breaches, fines due to tax law non-compliances, and other such issues.
To optimize your chances of choosing the right bookkeeping service for your needs, ask all potential candidates these questions:
10 Critical Questions to Ask When Choosing a Bookkeeping Service
What qualifications and experience do you have in bookkeeping?
Consider beginning with this easy question when interviewing a potential candidate to handle your bookkeeping. It gives you an opportunity to learn some basic information about a bookkeeper before delving into more nuanced topics.
Pay attention to how a bookkeeper (or a representative of a larger bookkeeping service) answers this question. If they’re able to confidently and promptly respond instead of fumbling or speaking in vague generalities, you might safely assume they are honestly representing their experience level.
Can you provide references from other businesses similar to mine?
All bookkeepers you interview probably want your business. They might therefore exaggerate when explaining why their service is right for you.
A bookkeeper worth hiring won’t merely claim they offer quality service. They’ll support their claims by providing you with testimonials from happy clients they currently serve or have served in the past. Ideally, they may even provide testimonials from clients whose businesses are similar to yours in terms of size, industry, financial conditions, etc.
How do you ensure data security and confidentiality?
A data breach (particularly one involving your company’s financial data) can lead to a range of potential consequences. Examples include (but certainly aren’t limited to) diminished customer trust, damage to your brand reputation, and even potential legal issues.
A bookkeeper can help you guard against these headaches by taking thorough steps to keep your data secure. Ask a bookkeeping service how they achieve this critical goal before deciding to hire them.
What bookkeeping software do you use, and are you certified in its use?
Bookkeepers are most effective when they use the proper tools. With this in mind, you might want to get a general sense of the tools a bookkeeper employs in their work before deciding to hire them.
How do you handle communication and updates with your clients?
Odds are you won’t be the only client a bookkeeper has. It would be unreasonable of you to assume they will always be able to drop everything and serve you at a moment’s notice.
Still, it’s always vital for a bookkeeper to maintain open lines of communication with a client. Confirm this is a priority of the bookkeeping service you’re considering by asking how they respond to calls, emails, etc. You might also ask if they adhere to any routines for providing their clients with regular updates.
How do you manage errors or discrepancies in the books?
Ideally, a bookkeeper should never make any mistakes, but that’s an unrealistic goal to set for them throughout the entirety of your working relationship with them.
Odds are high that some errors and discrepancies in the books will occur at some point. Ask about how a bookkeeper will handle these scenarios.
All bookkeepers will likely say they strive to avoid such errors whenever possible. However, a bookkeeper worth hiring should not promise to never make mistakes, as this is a guarantee no one can honestly make. Instead, they should provide you with a reasonable explanation regarding how they will manage the situation when mistakes do occur.
What is your pricing structure and what does it include?
Maintaining proper financial records lays a foundation that supports your business’s general financial wellness. Keep this in mind when choosing a bookkeeping service. By spending money to hire a truly reliable bookkeeper instead of opting for the more budget-friendly service, you could save (and even earn) a lot more money in the long run.
Regardless, you do need to account for your budget when choosing a bookkeeping service. Be sure to ask about their bookkeeper’s fees accordingly.
Can you help with tax preparation and compliance?
Not all bookkeepers offer the same range of services. You may be looking for a bookkeeper who can help you with managing your taxes along with maintaining basic financial records. If so, ask if they offer this service before hiring a particular bookkeeper.
How do you handle scaling services in line with business growth?
Here’s a common mistake entrepreneurs may make when choosing which bookkeeping service to hire: Hiring a bookkeeping service that can serve a business of their current size, without considering how their business’s growth could render a bookkeeper unable to continue meeting their needs in the future.
The fact that your business might be small right now doesn’t mean you plan on it staying that way. Thus, you may understandably want to learn how a bookkeeping service will be able to keep pace with your growth.
What sets your service apart from other bookkeeping services?
There’s no shortage of bookkeeping services from which to choose. A bookkeeper who truly stands out among the competition should be able to describe in relatively precise terms why they’re different from everyone else.
Choosing the Right Bookkeeping Service
Virtually all entrepreneurs appreciate the value of keeping accurate financial records. As a business owner, choosing the right bookkeeping service may be one of the most important early decisions you make for the business. Asking these questions can go a long way in helping you make the best decision.