bookkeeping-accountant
26-Jun-2021 By - team

Great bookkeepers are hard to find. Here’s a shortlist of what to look out for.

  1. Great bookkeepers take the time to do things right the first time.
    Great bookkeepers hurry slowly. Many shortcuts can be taken to speed up the bookkeeping, but they often come at a cost. There is usually more than one way of entering a transaction into accounting software, and each method has different costs and benefits. A great bookkeeper knows which short-cuts are genuine time-savers and which ones could potentially cause issues down the track.
  2. Great bookkeepers understand your business.
    A great bookkeeper will do more than just reconcile your bank accounts. They will take the time to understand your business, why you do what you do, and establish better ways of doing what you’re currently doing and help you know what you’re not doing and perhaps should be doing.
Blog Verticle Cta Img
Get started today

Got questions? We have answers

03 9568 5444
  1. Great bookkeepers ask questions.
    You know what they say about assumptions. Correctly allocating your transactions means that your bookkeeper needs to ask you questions regularly to understand your transactions. Sometimes this may seem painful. But it’s essential to get this right as errors can have compliance and tax implications that your accountant may overlook but that an audit would discover.
  2. Great bookkeepers know what they don’t know.
    A great bookkeeper won’t enter transactions if they don’t know whether they’re doing it right. Instead, they would acknowledge that they don’t know something than enter a trade that they know may cause grief later. They will stop, look up resources, speak to you, their peers, professional associations, and perhaps even your accountant. Their professionalism demands it.
  3. Great bookkeepers do their homework and stay up to date.
    The amount of legislation that a great bookkeeper needs to know is substantial. That legislation also changes constantly. That knowledge helps you become and remain compliant so that you can have peace of mind that those important aspects are being taken care of. Also, technology is having an enormous impact on how small businesses go about performing their bookkeeping. A great bookkeeper embraces the changes in technology and introduces your business’s improvements to make your processes more innovative, more efficient, and therefore more cost-effective.

How we used to do bookkeeping, and how we do it now

Bookkeeping 1.0 – the old way

The traditional bookkeeping method involves having your bookkeeper attend your office, sitting down in front of a computer, and processing paper documents into desktop accounting software. Data needs to be typed in manually, one field at a time. Bank reconciliations typically happen once the bookkeeper has received a paper statement from the bank or downloaded a transaction listing from your online banking platform.

Paperwork needs to be filed and stored for the requisite 5-7 years, and documents can go missing if they are removed and not returned. It requires a large amount of human labour to perform these tasks. Your bookkeeper typically does this at set intervals, usually weekly, monthly or quarterly. Reports such as a Profit & Loss and Balance Sheet are generally only available after these processing sessions.

The Pitfalls

Desktop software requires that each computer is manually upgraded when new software is released. Superannuation rates and tax tables need to be updated manually at the end of each financial year, and this needs to be repeated for each computer that uses the software, as once the data file is upgraded to the new version, it cannot be opened by a computer using an older version of the software.

It is a little known fact that approximately 25% of the average annual accounting bill of businesses is related to the costs that the external accountant incurs in getting the data out of your backed-up desktop accounting data file and into a format that they can work with. Prices include but are not limited to opening files in the correct version of the software, having Administrator passwords for unrestricted access and accurate versions of the data file (and issues when entries are made in that particular period after the data file has been sent to the accountant).

Bookkeeping 2.0 – how we do it now

The contemporary bookkeeping method involves having your bookkeeper work remotely using supplier bill processing software that uses optical character recognition to scan PDF documents and extract the supplier name, invoice number, invoice date, amount, GST and currency. 

Instead of the bookkeeper needing to enter all of this information manually, they merely need to do a quick check to ensure that the software has extracted the correct information, after which the data, as well as a copy of the source document, are pushed into your cloud accounting software. This means that supplier bills are stored in the software, and no paper filing is required. If a copy is needed, it can be downloaded and printed and the original remains.

The Benefits

Less labour is required, and this can be done daily for even 15 minutes at a time. Your data file ends up being much more up to date because your bookkeeper can log in and perform work when needed. This means that reports such as your Profit & Loss and Balance Sheets can be run much more frequently, giving the business owner greater and more frequent insights into their business performance.

Bank reconciliation can happen daily as bank feeds automatically import yesterday’s transactions every morning. This saves having to log in to Internet banking to find out which customers paid you the day before.

Cloud software gives you the flexibility to use your accounting software on any device with an internet browser. Invoices can be created on an iPad and issued to your client in real-time. It is also no longer necessary to do software upgrades, as the software lives in the cloud, much like Google Mail or Hotmail. Superannuation rates and tax tables are updated automatically too.

Also, Xero accounting software has enormous flexibility for add-ons. This means that data that is often duplicated in another software package or an Excel spreadsheet can be connected to Xero, eliminating duplication and redundant data. For example

  • a retail shop or restaurant may need to roster staff, have staff clock on and off securely and have automation in place for interpreting awards to correctly pay the proper loadings and penalty rates to simplify payroll;
  • a tradie might need a software package that sends automatic reminders at specified intervals chasing overdue invoices automatically;
  • a construction company might need to be able to quote jobs, track their sales pipeline, create and track jobs, including expenses and labour costs to subsequently bill clients in an accurate and timely manner;
  • A manufacturer might need to handle inventory, ingredients with batches and expiry dates and manage these sales.

All of these solutions and more can be linked to Xero accounting software, driving enormous back-end efficiencies, not only in your bookkeeping but also in your administrative overheads.

The five signs of a great bookkeeper

great-bookkeeper

A bookkeeper is a bit like a GP – there’s one on every corner, but great ones are hard to find. And when you do find one, you should never let them go. But how do you know if your bookkeeper is good, or even better, a great bookkeeper?

If you’re unsure of where to start looking for a great bookkeeper, here’s a handy tool to help you find someone nearby to you.

But knowing what to look for is another challenge entirely.

Let’s start with the things every bookkeeper should have before looking at what makes a great bookkeeper.

Training and accreditation

Every bookkeeper should have a formal bookkeeper or accounting training and preferably be a registered Business Activity Statements (BAS) agent.

A registered BAS agent means that the Tax Practitioners Board are satisfied that the bookkeeper has the required skills, qualifications and a minimum amount of experience to correctly account for GST and prepare your BAS according to legislation. Use this link to check if your bookkeeper is registered.

Experience

Like most professionals, the less experienced and less qualified bookkeeper will usually be cheaper. But judging bookkeepers by price is fraught with danger.

If you’re simply comparing hourly rates, a highly experienced bookkeeper will always seem more expensive. This is not true because most experienced bookkeepers will also work significantly faster and wiser than someone who has less experience.

An example of this happened to one of my clients recently. He paid his previous bookkeeper almost half of my rates, but she charged him 16 hours a quarter to do his work. When he came to me, he almost fell over when I told him our prices. However, it took me four hours in total to do his work – so yes, my rate was almost double, but his bill was less than half.

Now, if you want to focus on kicking some severe business butts and not worry about your bookkeeping, a good bookkeeper may not be good enough. 

You want and need a great bookkeeper. A great bookkeeper will do more than just get you over the line with your compliance. Here are five signs your bookkeeper is doing a great job.

1. Great bookkeepers understand your process

He or she will take the time to understand your business and how you operate so they can make sure that the processes are as efficient and straightforward as possible and nothing is missed or duplicated. They will be able to see areas that can be streamlined in your small business.

2. Great bookkeepers ask questions

Many business owners find questions annoying. However, to ensure transactions are correctly allocated, it is better that your bookkeeper ask questions rather than guess. One of my IT clients had a bookkeeper who assigned computer purchases to ‘Computer Equipment in the balance sheet rather than hardware purchases in ‘Cost of Goods Sold’. For months they thought their profit figures were significant until their accountant did their tax return and asked about all their asset purchases (which weren’t) to claim tax deductions. If only she had asked.

3. Great bookkeepers know what they don’t know

Not only do they know what is legally within their scope. For example, BAS agents cannot give any income tax or fringe benefits tax (FBT) advice. But they are also not afraid to say “I don’t know” rather than worry about looking silly and will contact your accountant for advice.

4. Great bookkeepers do their homework 

A sign of a great bookkeeper is up to date on what is happening in the bookkeeping, accounting and technology spaces. The bookkeeping and accounting industries have evolved considerably over the past few years due to changing technologies.

Your bookkeeper should explain to you and encourage you to use technology to save time and money by automating processes with cloud accounting packages such as MYOB Essentials or MYOB AccountRight.

A recent survey shows that small business owners save an average of 10 hours a month just by using bank feeds, a service that links your bank account to your accounting software. After using bank feeds, I think that figure is on the low side and could easily be doubled.

5. Great bookkeepers are people you can trust

Finally, the relationship between a client and a bookkeeper is sacred. Most people won’t share their financial details with friends or even family. Yet, this person is privy to everything – mainly if you use one account for business and personal, but that’s another article altogether.

Make sure you like your bookkeeper, that you trust them and feel comfortable being completely honest with them. Your bookkeeper cannot help you get the most out of your accounts if you are not completely transparent with them.

SIX QUALITIES YOU NEED IN A GREAT BOOKKEEPER

Now you have made the critical decision to hire a bookkeeper for your business, how do you go about finding the right person for the job, and what qualities do you need to look for in a great bookkeeper?  We explore the top six skills and abilities you need in a bookkeeper, ensuring you find the best possible partner to look after your business’ financials.

Reliable

Look for companies with a long-standing history that promotes integrity and can supply testimonials from clients who are happy to provide their honest opinion on their reliability, honesty, ethics and efficiency of their services.  Don’t be afraid to ask a bookkeeper how they would handle a particular financial situation specific to your business.

You need a seasoned bookkeeper who’s willing to work for and prioritise you.  This means being respectful of your time, having a proactive approach to communication, and demonstrating the capacity to understand your professional objectives. Taking some time to investigate their customer service behaviours and client relations will ensure you choose the small business bookkeeper most likely to help you meet your financial goals.

Well-informed, skilled, trained and certified.

Up-to-date software knowledge is a must.  Bookkeepers familiar with online accounting software can automate many processes and reduce the amount of time spent on data entry.

Cloud-based systems help bookkeepers to keep accounts up-to-date and enable business owners to identify issues more quickly to make decisions to improve performance and promote business growth.

financial-planning

Every professional bookkeeper should understand the significance of your company’s income, expenses, assets, liabilities and equity, but they should also be able to:

  • provide real-time, customised financial reporting and analysis,
  • offer insight into your economic progress as it relates to your goals, and
  • make vital services like strategic planning, financial forecasting, and acquisition or expansion management available to your business.

Manual bookkeeping techniques aren’t enough in today’s digital world.  Be sure the bookkeeper you choose is up-to-date with the latest developments in accounting software and cloud-based technology.

Some professionals are guilty of earning their credentials and never looking back. While most bookkeepers make an effort to stay abreast of evolving tax and business regulations that could affect your company, it shouldn’t end there. Look for a firm whose skills, business services and technological innovation are continually being upgraded to keep you at the forefront of your industry and ahead of the competition.

Organised and efficient

You can’t assume that every bookkeeper is a born organiser and addicted to the details. Often these skills come with experience and play a significant role in the efficient interpretation, reporting and retrieval of financial data, especially when they have multiple clients.  Ask about review policies and safety nets, and remember that the more streamlined your bookkeeping operations are, the more positive an impact it will have on your company’s bottom line.

A good bookkeeper makes specific processes efficient and adheres to providing you with timely reporting and meeting the deadlines required in your business.

Bookkeepers should be dedicated to your financial success as well as your business success. Your bookkeeper should have an excellent eye for detail and care about keeping your accounts up-to-date and free from errors.

Strong communication skills

Your bookkeeper must be aware of your business operations, goals and issues to do their job correctly. The ideal bookkeeper must have the ability to enhance relationships with managers, customers, suppliers and staff alike.

Some bookkeepers are much better with numbers than they are with people, but the exemplary bookkeeping service for your business must be adept at dealing with both. Make sure your bookkeeper listens well and explains things in a way that makes sense to you. Your business is as individual as you are, and a bookkeeper who adopts a one-size-fits-all approach to communication will be unlikely to meet your needs or expectations.

Industry understanding

A good bookkeeper must understand your industry, your business processes and your requirements so they can hit the road running.

Beyond the day-to-day management of your company’s accounting activities, your bookkeeper should have a solid understanding of the industry you’re in and how it relates to your specific financial situation. The more familiar they are with industry trends and operations, the more likely a bookkeeping company can spot oversights and patterns in your data. That can prevent reporting errors and help you to capitalise on potential tax savings.

Ethical and trustworthy

This is critical and non-negotiable. Both parties must feel comfortable with each other to build a relationship based on trust.

It is essential to provide all the correct information to your bookkeeper so they can keep accurate, up-to-date records for you. It would make good business sense to protect yourself by having a confidentiality agreement in place.  

While it’s essential to trust your bookkeeper, you should make sure that your business is protected too. For example, it shouldn’t be necessary to allow bookkeepers access to the business bank accounts. It is acceptable for them to prepare the supplier payment file, but the business owner is the right person to process the banking payment.  When new suppliers are created, there should be checks to ensure that the bank account being paid to is a genuine supplier bank account and that invoices supplied are also open.

Guest post by : team Form -

Like this? Share it...