Hiring professionals for a small business is an important process especially when that person will be handling company finances. Bookkeepers can be either internal employees or outside contractors who do specific record keeping tasks on a regular basis. Deciding whether to have an internal position or use an outside consultant will depend on how much time the person needs to spend maintaining the company records.
Bookkeepers do a variety of tasks for businesses including: managing and recording daily financial transactions, payroll, account reconciliations, preparation of financial reports, interpretation and explanation of financial statements, managing cash flow, handling the accounting systems, collection of accounts receivable and much more. The best bookkeepers have a thorough understanding of generally accepted accounting principles (GAAP) and the accounting system used by the business. They must be trustworthy and detail oriented. Accuracy is critical. They need to be able to communicate financial information to non-financial business owners. They need to be comfortable working closely with the company CPA on tax and reporting issues.
The first step in this process is to identify whether this will be a part time employee, full time employee or outside contractor. It will depend on how many financial transactions the company has each day, week or month. Companies with a large volume of transactions generally benefit from having an employee. Companies with few transactions can often save money by using an outside contractor who comes in periodically to record transactions or prepare payments for suppliers or create reports. It will also depend on how quickly financial reporting needs to be done. Some industries have strict reporting requirements that make an internal bookkeeper a better option. Next create a job description that includes the important tasks to be performed by this person. Be sure to have some separation of duties. For example, the person who does the bank reconciliation should not also have authorization to sign checks.
Finding the best person for the job can be challenging. Start by asking for referrals from other business owners, the company CPA, banker or attorney. The chamber of commerce or other civic organizations are another source of referrals. Perhaps an existing employee knows of someone. At the Clatsop Community College Small Business Development Center, we also have list of bookkeepers and CPAs that can be provided.
Interview two or three prospective bookkeepers and be sure to do a background check before making a final decision.
Having the right bookkeeper can help a business grow and be more profitable because financial information is available to make important business decisions in a timely manner.
Last, and most important, make sure that you as a business owner understand how to read and analyze your reports to make financial decisions. We can help with that! Contact us at email@example.com or call 503-338-2402 to set up an appointment with one of our advisors for free and confidential advising, and to get on our email list where we share information on all SBDC workshops to the business community.