If you have become terrified at the thought of having to “do the accounts” at the end of each month or quarter or are sick of dealing with shoeboxes full of receipts it could be time you considered hiring a bookkeeper. Here are eleven questions to ask before you select one.
1 What qualifications and professional memberships do you hold?
The Tax Agent Services Act 2009 (TASA2009) was enacted as of 1 March 2010. This means that anyone providing Business Activity Statement (BAS) services for a fee must be a Registered BAS Agent. The provision of a BAS Service can be as simple as choosing which tax code to apply to a transaction in in an accounting software programme. If you need someone to assist you with your BAS’s then they will need to be a Registered BAS Agent.
To become a Registered BAS Agent an applicant must have attained Certificate IV level qualifications and have a minimum of 1000 hours supervised experience. They must have Professional Indemnity Insurance and comply with the Taxation Practitioners Board Code of Professional Conduct. To maintain registration they must undertake a minimum amount of Continuing Professional Education (CPE) and practice hours.
Membership of an approved professional organisation means that your prospective bookkeeper will have ready access to ongoing CPE and other resources that will assist them in helping you.
2 What insurances do you have?
Professional Indemnity Insurance is required under TASA2009
3 Who will undertake the data entry and BAS Preparation?
Establish whether the work will be consistently undertaken by the same bookkeeper or by any member of the team and find out how it will be reviewed.
4 What experience / references do you have?
References may not always be reliable but it is worth taking the effort to do a little research before hiring.
5 If the work is being done using a computerised accounting package, who retains ownership of the datafile?
Some bookkeepers may process your work using their own software. This may save you from making the purchase but if you later choose to bring the work in-house, there may be costs involved to make the change.
6 What systems / quality assurance procedures do you employ to ensure the work is done properly?
Human error creeps into everything. Good bookkeepers employ systems and procedures to ensure their work gets checked so that any errors are detected and fixed long before important tax lodgements or financial reports are prepared. Find out how your prospective bookkeeper can offer you assurance that they work they do is accurate and reliable.
7 Where will the work be done?
Will the bookkeeper need to come in to your office, and if so, do you have appropriate facilities to accommodate them. Or will the work be done at their office in which case you will need to discuss how the paperwork and reporting will flow between you both.
In recent years technology has enabled the possibility of the work being able to be done remotely. Ask your prospective bookkeeper if this could work for you too.
8 Who will be responsible for rectification work?
Mistakes can go back several years and corrections can quickly become very costly with re-keying data, reworking affected BAS’s and reviewing end of year reporting for tax and other purposes. Make sure your prospective bookkeeper will fix any mistakes they make free of charge.
9 What does the bookkeeper need from you to process the work?
Before hiring, establish what your bookkeeper will need from you on a regular basis. When will they need all the receipts and bank statements by, will you need to provide account codes and explanations etc. Chances are that your bookkeeping fees will be a little lower if you sort everything before handing it over.
10 How will your bookkeeper communicate with your accountant (and vice versa)?
A good bookkeeper will maintain an open line of communication with your accountant as this will make your accountant’s job easier and thus your accounting fees lower. However in some cases the business tax accountant doesn’t return the favour and when this happens you suffer also.
Establish how the bookkeeper will work with your accountant and how the accountant will charge you. We recommend that you introduce your new bookkeeper to your accountant and encourage a professional relationship between them.
11 What will it cost?
The elephant in the room is that the work of bookkeepers is vastly undervalued. Good professional bookkeepers are tertiary qualified and bring thousands of hours of expertise and experience to your business. If your prospective bookkeeper is a member of professional bookkeepers association they will likely have ready access to vast technical libraries and support.
Traditionally bookkeepers charge by the hour but it is becoming more common for bookkeepers to offer fixed monthly billing. This can help you with your cash flow management, so discuss with your prospective bookkeeper how they charge and which option would work best for you.
Conclusion
Remember that your bookkeeper is on the front line of your business and is likely to be the first person to spot aberrations or developing trends which can be addressed long before your accountant does your end of year accounts (sometimes several years down the track!).
Accountants report they spend up to 30% of their time fixing bookkeeping mistakes. It may cost a little more to select someone who is appropriately qualified and experienced but the payoff is in the reduced amount of time your accountant needs to fix up the mess that an unsuitable candidate is likely to leave behind.
Once you have selected your bookkeeper, don’t just set and forget. Make yourself available to review the regular management reports that they provide and incorporate them into your decision making processes. It would be a real shame to simply waste all the experience and expertise that a good professional bookkeeper will bring to your business.
For more information download our awkwardly titled FREE eBook Why Relying on Your Profit & Loss Report Can Send You Broke plus Ten (or 11) Tips on How to Improve Your Cash Flow plus Is Your Bookkeeper Really looking After You plus Much Much More!
Contact Great Perth Bookkeeping today to discuss how we can assist with your bookkeeping needs.