11 Tips For Working With A New Bookkeeper

If you run your own business, this advice is for you. You might be doing everything yourself, including the bookkeeping. Or, you're just getting started and haven't even decided on accounting software yet. At some point, outsourcing your bookkeeping will make your life easier.

Having a professional provide bookkeeping services can be a huge benefit. Unfortunately, it can also be a source of frustration if you don't go in with a solid plan.

In my decades of running a bookkeeping business, I have seen too many entrepreneurs underutilize my services. I want you to grow your business and I think these tips will really help.

11 tips for working with a new bookkeeper.

1. Ask questions about what they will and won't do for your business.
2. Provide the information they request in a timely manner.
3. Delegate, don't abdicate your company's bookkeeping.
4. Stay curious about your financial health.
5. Create and review a budget spreadsheet.
6. Don't create a silo. Connect them with other members of the team.
7. Keep them informed of changes to the business.
8. Get their advice on financial decisions.
9. Have them create financial scenarios for you.
10. Have them document their processes.
11. Keep their access secure but shared.

Ask questions about what they will and won't do for your business.

Whether you're just getting started in business or not, you may not know exactly what a bookkeeper does. Let's start there.

What does a bookkeeper do?

A bookkeeper is responsible for accurately recording your business' day-to-day activities, keeping your bank accounts reconciled, tracking who you owe and who owes you, and sharing regular financial reports with you and your team so you always know how your business is performing.

There will be differences between bookkeepers. Some may only handle these basic tasks. If needed, some will handle your payroll, file sales tax returns, send your invoices, track down client payments, and pay your vendors. They can also provide bookkeeping software training for you and your employees.

It's important to find out all of the tasks they can perform. It's a good idea to ask again as your business grows. What you needed last year might not be what you need today. Find out if they can help you manage these new challenges.

Provide the information they request in a timely manner.

I need a lot of information from you as your bookkeeper. This is definitely not one of those jobs where you can leave me alone, and I'll just "figure it out" myself. I know how to record the transactions and reconcile the accounts, but I can't maintain your records if I don't have the receipts or the bank statements.

Business owners tend to prioritize sales over admin work. If they have a request to follow up with a big client, and a request to track down financial documents, they will likely give the client a call first. That's understandable, but don't ignore the other requests.

Getting a statement or a few receipts isn't a big deal on its own. But when these start to stack up, the bookkeeping falls behind. That can be bad because you're not getting regular financial statements. These statements will help you make important decisions about the company. It can also have a ripple effect, which could cause you to miss important tax deadlines.

I'll speak for your bookkeeper and say this. I don't want to have to bug you for those receipts, either. I'd much rather get it done myself. I'm only reaching out because I ran out of ways to do it myself. So answering those requests as soon as you can really help everyone involved.

Delegate, don't abdicate your company's bookkeeping.

When you work with a bookkeeper, you're not washing your hands of the finances. You are simply getting help with some of the day-to-day tasks. As a business owner, you need to have regular interactions with your bookkeeper. As you grow, you may have someone else who manages these interactions, but you should never be completely detached.

This is good for your business and for the bookkeeper. It's difficult to do a good job when you don't get any feedback. The feedback helps you because your bookkeeper might be warning you about issues that could hurt your business. It's also helpful for the bookkeeper, as it will let them know if they are focusing on the wrong tasks or making incorrect assumptions about your transactions.

Stay curious about your financial health.

Even if you are checking in with your bookkeeper regularly, it's important to stay curious about your company's financial health. Responding to requests for information is great. Attending the monthly meeting to review the financial reports is even better. But here's the important part.

Really read the financial statements and ask questions, especially if you don't understand what you're seeing.

It's tempting to gloss over the reports. They may be confusing or even a bit boring. Maybe you're in your fourth meeting of the day, and you just aren't in the mood to look at a spreadsheet or an income statement. I get it.

Find time to read through the reports. Make notes about the parts that don't make sense. Write down follow-up questions. These aren't generic reports. These show you exactly how your business is performing. It may contain the information you need in order to make a really big decision on which direction to take the business.

Don't feel bad about asking questions.

And seriously, there are no dumb questions. I love answering questions about the reports. I didn't spend that many hours preparing them for nothing. I also spent time reviewing them and preparing my answers to the questions I had anticipated.

Create and review a budget spreadsheet.

If you did your own bookkeeping for a while, you may have stuck to the bare essentials. If you're new to running a business, you may not know what reports or tools are available.

One thing I highly recommend is to work with your bookkeeper to create a budget for your small business. I wrote about creating a small business budget earlier, so I'd encourage you to check out that post next. In that post, I mention the benefit of creating two distinct budgets each year.

1. Create an aspirational one that gives you revenue and profit targets for the year. You don't make changes to this one.
2. Create a version of that budget that you adjust throughout the year as your situation changes.
   1. Maybe you needed to add more staff, or your costs increased. Or maybe you landed a huge client that just changed how the rest of the year will look.

Good bookkeepers are not just historians. Yes, a lot of our work focuses on the past. But you also need to look to your future needs, and they can help provide you with context. Based on what we've seen in your past and with our years of experience, we can help you anticipate how certain decisions will shape the future.

Don't create a silo. Connect them with other members of the team.

In my experience, the finance department can get isolated from the rest of the company. This is especially true if your bookkeeper, like me, is a remote contractor rather than an in-house employee. I'm not going to be at the company picnic or sitting in on the weekly staff meeting. In those situations, it's easy for the bookkeeper to only have the business owner as a point of contact.

Introduce your bookkeeper to the team.

When you are the only point of contact, you can become a bottleneck. And it's just more work for you. You are responsible for sharing all of the financial reports and insights with key members of your team. You'll need to field their follow-up questions. Or, even worse, you are spending your time relaying questions and answers back and forth.

Instead, introduce your bookkeeper to the people in your company who would benefit from certain aspects of the financial reports. Sales might want to ask about changes in profit margins. Maybe Marketing wants to know how much their costs have increased with certain vendors.

If you empower your team to take advantage of this critical resource, you will find the entire business runs more efficiently.

Keep them informed of changes to the business.

I can't tell you how many times I have found out about a major change to a client's business long after it happened. Often I find out in passing.

Employee (not the owner): "Hey, our new hire wanted to know why they didn't get paid last week."

Me: "Who? When did you hire them?"

This has actually happened. I think a company that meets regularly will share information like this organically. They forget that I'm not in those meetings, so it doesn't occur to them to update me.

When you make a change in the business that could have financial implications, the bare minimum is to inform your bookkeeper when you make the decision. That new hire might be in a location where your company isn't registered to do business. There may be additional work or issues that you didn't consider, and your bookkeeper might need advanced warning in order to prevent unnecessary costs.

Get their advice on financial decisions.

Often the better choice is to get their input on the decision before you make it. I don't mean every business decision. I probably can't give you good advice on your next marketing campaign. But they might have insights into your situation.

Maybe they determine there's a cheaper way to fix the problem. Or one choice will cause big compliance issues you hadn't considered. Your bookkeeper might have extensive knowledge of your industry. They may have even gone through this big change with other clients and can provide guidance.

Have them create financial scenarios for you.

Not all bookkeepers will offer this, but some will be able to do some scenario planning or forecasting for you.

Let's say you are about to take on more work. Your team needs help, but you're not sure if you can afford to hire a full-time employee. Maybe you can contract out the work instead. Ask your bookkeeper if they can help. They could run some calculations on how each choice will impact your bottom line.

Getting them to do this extra work now might save you thousands of dollars you would have spent going down the wrong path.

Have them document their processes.

If you have a great bookkeeper, they can become an essential part of how your business operates. The downside of being essential is that things can fall apart when they aren't there. This is bad enough if they take two weeks off in the summer. It can be devastating if they suddenly leave your business.

Make sure your bookkeeper is documenting their processes. You can call it whatever you want. Standard operating procedures, a playbook, an instruction manual, it's all the same thing. You and your bookkeeper need to have a document that spells out the steps to replicate their work.

In the short term, this gives you instructions on how to run payroll when the bookkeeper is away. In the long term, this will be your employee manual in case you ever need to replace your bookkeeper entirely.

Keep their access secure but shared.

This advice applies to all of your team but, in particular, anyone with access to financial data. Your bookkeeper will probably need access to important business accounts like your bank, payroll system, and sites where they will file things like sales tax.

Your first priority is making these logins secure. You'll want them to use complex passwords and two-factor authentication.

The second priority is having these logins shared with you. Once again, this protects you if they are away or they leave. I've run into this several times. An employee will leave the company, and only after the fact will we realize that they had the passwords to crucial sites.

For this, I would highly recommend setting up something like 1Password to keep your sensitive financial information safe. There are other options out there, but this is the one I keep coming back to. Let me know if you'd like a full post about this. I have used it for years for myself, but it's also great for teams. You can set up folders that only contain certain logins and sensitive information. You can then assign team members to those folders.

Instead of having your bookkeeper keep their logins in their own system, have all of the critical logins in a shared finance team folder. Make sure you and the bookkeeper have access to that shared folder. Since 1Password can also create one-time passwords for two-factor authentication, you don't have the code going to their phone or their email address. Either one of you will be able to log in securely without that panicked text to "please send me the code you just got".

Conclusion

Adding a good bookkeeper to your team will reduce your stress and help you grow your business. By following these steps, you will get the most out of this new resource, and you'll save yourself a lot of headaches.

If you have advice on working with a bookkeeper, please share it in the comments.

Are you stressed out about your finances? If you need help with your bookkeeping or advice on working with a bookkeeper, please reach out. I'd love to set up some time to review your current system and help you grow your small business.