Do you know if your bookkeeper is competent or letting your business spiral out of control?

It’s important that you have complete confidence that your bookkeeper is doing their job well and always has your company’s bottom line in mind. The right trusted partner can provide proactive, strategic advice that leads to a good increase in your margins. They can also ensure your business’ compliance with the Canada Revenue Agency (CRA). Do you know if your current bookkeeping situation can grow with you? Will they care to understand the ins and outs of your daily bookkeeping that will help take your business to the next level? Here are eight questions to ask yourself concerning your bookkeeper:

1) Do they communicate in the same style as you?

At a time when in-person meetings are being avoided, making personal connections has never been more important. Video meetings have become very popular because they are more personal and more intimate than a phone call. You can see body language and facial expressions, which are very important for communication. You may have communication problems if you’re the type of person that needs to chat it out on a regular basis and your bookkeeper is only willing to communicate via the occasional email. It’s easy for a business owner to not know what’s happening with their books when there’s little to no communication. Ideally, you and your bookkeeper should have similar and agreed upon communication 

2) Do they respond back to you?

It can be incredibly frustrating when you email your bookkeeper with a question, only to have them take several days to respond—if they respond at all. That’s bad for business. There are two reasons it could happen:

a) You’re not one of their “A List” clients. In fact, you are at the bottom of the barrel.  Not only are you not a priority, they don’t care about your business at all.

b) They are disorganized and/or are procrastinators. Unfortunately, some bookkeepers and traditional accounting firms don’t have practice management software in place and may forget deadlines, down to the last day. Your deadlines are known well in advance, so they have no excuse, really. For one of our clients, their final straw with a previous bookkeeper was due to one of those ‘last minute’ phone calls. The bookkeeper rang up one day and said, “this tax payment is due now, you need to go to the bank today with $5000.” 

At UpSide, we email our clients on the 1st of each month to request any documentation that needs to be uploaded, and to inform them of any hard deadline that will come at the end of the month. We also have a deadline reminder set for two weeks in advance.

3) Do they ask questions or give you advice?

A good bookkeeper should be helping you identify problem and opportunity areas, and that comes with asking questions and giving advice. For example, a simple insight could be, “hey I noticed you haven’t yet cashed your paycheque from last week”. Or, they may give suggestions on how to cut costs.  If your bookkeeper doesn’t ask questions and give advice about your particular day-to-day realities and business needs, then you may want to look for  a new one.

4) Do they let you see the books?

It’s always a bad sign if your bookkeeper seems to be really protective of their work and unwilling to give your or anyone else a view of the books. They may be mismanaging your books or even stealing from your business. If you ask for oversight of the books, a bad bookkeeper will become defensive and overly protective. Nowadays, with cloud accounting software, you don’t have to be in front of a particular desktop to see the files.  You can and you should always have login credentials and 24/7 access. If your bookkeeper makes trouble, cancel them out and add a new bookkeeper when you gain access yourself.

5) Do they give you monthly reports?

As a business owner you should be receiving your business’  income statement (profit & loss), balance sheet on a monthly basis. When it comes to your company’s books, receiving timely and accurate reports is just as important as categorizing transactions and reconciling the books. Monthly reports provide you with a regular look at your company’s financial health, so you can make the right decisions to manage growth. If your bookkeeper doesn’t send these monthly reports to you, they are, simply, not putting you first. We recognize that the majority of small business owners have trouble deciphering what these reports mean, but you should still receive them by email every single month.

6) Do they have Google reviews or other social proof?

Does your bookkeeper have social proof that allows them to take advantage of customer advocacy in order to influence potential clients? In today’s online world, social proof is effective because it empowers real customers to tell their story. At the very least, they should have an updated website. Many old-fashioned accounting and bookkeeping firms have way too many referrals from business owners to care about keeping up with the times. They’ve been doing it the same way for decades, and favour their large “A List” clients. If they don’t have an online presence, who are they marketing to? They won’t be investing in you.

7) Do they have proper qualifications?

There are many so-called bookkeepers who set up shop without any experience.  We’ve heard stories of practicing well-paid ‘bookkeepers’ who didn’t actually know the meaning of basic terms like “reconciliation” or “accrual”, which is brazen and upsetting, to say the very least. Unfortunately, there is no regulatory body in Canada that ensures bookkeepers are adequately trained, and/or are doing what they are expected to do for their clients. While no one is obligated to take a bookkeeping program to work in the field, many bookkeepers do for a variety of reasons, including proving that they have the basic knowledge required to help their clients with their bookkeeping needs. Unfortunately, many people realize too late that entrusting someone cheap and unqualified is actually costing them. Big time. In actuality, they end up spending more money on all of the mistakes and audits, than if they had just hired a reputable firm in the first place.

8) Did you receive a notice from the CRA?

This is a HUGE RED FLAG. If you’ve received a brown envelope from the Canada Revenue Agency, that could mean your accounting is a mess. It could be a letter notifying you that an audit is coming your way.  If this is the case, you may want to have a representative like a tax lawyer, or your accountant, assist on your behalf. You’re going to want to have quality professional advisors that you can rely on to help you through the process.

Your bookkeeper is not working effectively for you if they don’t share communication styles with you, don’t respond in good time, don’t ask questions or give advice, don’t let you see the books, don’t give you monthly updates, don’t have qualifications and/or you’ve received multiple notices from the CRA. If you’re not satisfied with your current bookkeeping situation and need to revise your strategy and find a better solution, see if we are a good fit!