Category: Accounting

What qualities are important in a good bookkeeper?

There are a good number of opinions when it is about choosing between a good and efficient Bookkeeper and doing it all on your own. Bookkeepers not only file your income tax returns but they also maintain your income records. You may employ a tax accountant or tax preparer to arrange your income tax return files but a missing record or incorrect data will end up in erroneous files and massive penalties by the government.

There are various ways to maintain business records. Some people prefer cloud storage services for safekeeping their data. Some people choose in-house bookkeeping services by hiring a bookkeeper to take care of bookkeeping digitally or by making use of conventional methods of organizing paper files.

There are a few basic characteristics that a good bookkeeper possesses. Furthermore, you can closely analyze the performance of a bookkeeper and mold it in accordance to your own business needs. If you are a business owner and you have decided to choose a bookkeeper for handling the financial accounts of your business, the following are the 8 essential characteristics present in a good and efficient bookkeeper:

Trustworthy and Competent:

Seeing that you are going to hand over all your business record matters to him, it is important for your bookkeeper to be trustworthy and competent. Bookkeepers do not have to hold CPA accreditation but they should have a degree in accounting & finance from a reputed university or institute. The professional competence of a bookkeeper can also be calculated by estimating their passion and interest in bookkeeping. As a ground reality, it is a boring job and people in this field for a few years might start losing interest. A job that is done without interest results in imperfection.

Good Communicator

Poor communication between the team manager and the bookkeeper may end up in chaos. It is extremely important for a bookkeeper to be a good communicator so that he not only establishes a free flow of information but also becomes a team player. Assessing the communication skills of a person is not that difficult. Apart from language, expression, and tone also closely look at and analyze the body language of that person.

Computer & Software Expert

Bookkeeping services are shifting from the paper files to a computer-based information system. There is a good number of small business accounting software programs that people use to keep business records. A good bookkeeper is not just an expert in software and computer but also willing to take on the advanced and modern technology. Even if you secure the records in paper libraries, there are pretty good chances to move them to computer-generated bookkeeping programs in the years to come.

Ability

If you ask someone to do your bookkeeping or your accounts you have to know they have the ability to do the work properly.  A lot of business owners think anyone can do bookkeeping and pass the task on to their receptionist or an administrator.  But the priority for those people is the part of the job they enjoy doing and if bookkeeping is not top of that list it won’t get done properly. An whilst someone can be trained to do the bookkeeping if they don’t know where to start it can all become a bit of a mess.  I have even seen experienced bookkeepers get in a muddle when they have to start using new software or add in a new element to their bookkeeping.

A qualified bookkeeper will know the importance of consistency and accuracy when recording transactions, they will be able to manage the complexities of VAT and understand why and how to reconcile control accounts.  Accounts have a structure and every transaction needs to be put in the correct place within that structure in order to produce accurate and meaningful accounts.  A good bookkeeper will know this.  We frequently find income recorded in expense codes and expenses in income codes and of course one of the effects of this is a lower turnover showing in your management reports – not so good if the bank manager needs to see them.

So you need to be sure that the person you have tasked with keeping your accounts has the ability to do all the things you need them to do.  Don’t hand it over and then forget about it because as a business owner you are still responsible for the finances of your business and should know whether your bookkeeper is doing what needs to be done correctly.

Familiar with and uses new technology

While good bookkeeping is not inherently reliant on the use of modern technology, it is good to know that the bookkeeper you will choose is familiar and is currently using legitimate bookkeeping and accounting software packages. Not only can modern technology consolidate processes, but it also helps ensure the safety and security of your data through automatic backups. It is a great advantage to choose a bookkeeper who uses the latest bookkeeping programs and systems such as cloud integrators.

A good communicator

Most problems arise in business from the misunderstanding and miscommunication between two parties, so choose a bookkeeper with good communication skills. If they don’t understand something, they should be willing to ask you for clarification or help. Always remember that communication is critical, especially in the world of business, as it enables you to have a firm grasp of what’s taking place in your company without you having to see everything all the time.

Skills

Before anything else, your candidate needs to know the basics of bookkeeping, such as maintaining records of financial transactions, posting transactions, reconciling of accounts, etc., as these things would just be some of the things that your applicant would do in the event that he or she will be hired for the position.

On the other hand, some skills can be handy as well, like the following:

• Being a team player—Having the ability to work with other people is not a skill that flows in the veins of everybody else, sometimes it is learned. So, if you need someone who needs to communicate with people on a daily basis because you will put this person in a team, then it is important to consider that your bookkeeper should have no issues with people in general and has the capability of dealing with them, pinpointing the problem and creating a solution as a team.

• Having good organizational skills—A company always needs to be organized from one department to another, especially the financial side of the firm. Since they are handling an integral part of an organization, bookkeepers need to retain their focus on the tasks at hand so you will need someone who knows how to organize and is naturally organized with everything they do.

• Being aware how your business works—People who have this kind of understanding are believed to have good judgment when dealing with any situation in your business. Business savvy people are quick on their feet in deciding. Bookkeepers would need this in some areas of their job as they deal with their day-to-day activities.

• Possessing problem-solving skills—Bookkeepers can use this skill in times when they find out about any discrepancies in their financial records. They can simply think of ways to solve the issue that they encounter in order to make everything in the correct format or for the records to be fixed.

Problem-solving skills

Every organization needs problem solvers, not complainers. This couldn’t be truer in the financial world. Companies want bookkeepers who can not only spot issues, for instance, irregularities in the accounts or statements but is also able to figure out what caused the abnormality and offer appropriate solutions.

Additionally, bookkeepers need to be inquisitive by nature so that they have a pulse on things and are able to pre-empt issues and problems even before they crop up.

A thirst for learning

You may have already taken a bookkeeping course or thinking about one. Getting the right education is a great first step, however, the desire for continuous learning goes beyond that. It is the urge to stay on top of any changes in the industry as well as a passion for self-improvement. For example, you could learn a new accounting software.

A bookkeeper who keeps learning not only stays relevant but also becomes more valuable to their employer and clients. However, you don’t necessarily have to enroll only bookkeeping-related courses. You can also polish your skills in the areas of communication or problem solving for instance.

Ways To Improve Your Bookkeeping

It’s not enough to want to change the world with your product, or even become the best in your field. You have to make sure that you can handle the simple transactions that are going to keep your business afloat day-by-day.

Choose the best software

You need the right tools for any job. When it comes to bookkeeping, it’s no different. Right now, we are living in a great time for apps and software. Being able to access some of the best services and applications ever designed from your smartphone or tablet means that businesses of any size can use the best accounting software out there.

Automate your record keeping

Artificial intelligence is a few years away yet, but with a few simple steps, you can already let your computers and the cloud take care of your business automation. Using tools such as Zapier, you can connect apps between each other, meaning that when your invoices are paid you can receive notifications, log data entry and even send reports directly to your accountants without even opening your laptop.

Get it right from the start

Setting up your bookkeeping software, processes and systems the first time around isn’t too difficult. If you have an expert advisor looking over it and helping you sort everything out, it won’t take away weeks of your life and give you grey hairs. But you know what will?

Be pro-active

You want to make sure that you aren’t in a scramble to get things ready and have your financial records in order when tax-time comes around. Being pro-active in your bookkeeping is the best way to ensure that you stay organised and you don’t miss any crucial dates, times or data.

Things You Should Never Ask Your Accountant

Whether you’re already in business or planning to become a small-business owner, one of your best resources may come from an unexpected source. It’s not your first hire, your personal assistant or even your lawyer. Rather, it’s the person who balances your budget, prepares your taxes and P&L statements, and helps you leverage technology to gain efficiency: your accountant.

Given the breadth of experience and wealth of knowledge gained from working with multiple businesses, a good accountant has the potential to be both a mentor and a partner―if you let them.

How to Choose the Right Accountant

Your accountant is potentially your most trusted business advisor. And when it comes to business, knowing whom to trust and getting the financial side of things right from the beginning is imperative.

Never ask your accountant to do anything that can be automated.

Some entrepreneurs still ask their accountants to manage their checkbook―to manually process payments, receipts and payroll transactions. This is an easily automated task!

Never ask your accountant to tell you how your business is performing.

Why? Because you should already know! Some business owners abdicate their role of running the business instead of clearly delegating specific tasks. The key difference here is responsibility

Don’t have a bookkeeper!

If I do my own books, I will be close to my cashflow.

Of course, as a business owner you want to feel close to what is going on in your business this is completely understandable more than that it’s imperative if you are to make timely decisions to ensure your business moves in the right direction. Does this mean you have to do the nitty gritty of the bookkeeping yourself? I don’t think so, with a competent bookkeeper dealing with the day to day stuff you, as the business owner can get on with running the business. You should be reading your Financial Statements and the Accounts Receivable report, not preparing them. Your time and skills are too valuable to be doing work that others can do and probably do more efficiently because it is their area of expertise. The bookkeeper is also a second pair of eyes and they will often pick up on things that would otherwise be overlooked, for example that Direct Debit that is going out of the bank each month for software you stopped using some time ago.

You feel uncomfortable sharing confidential information

This is only natural, it’s private right? Well not exactly, if you are a limited company you will be required to file accounts at Companies House, and these can be viewed by anyone. So, this is something the business owner needs to overcome; especially if the business is a limited company. As a business owner you simply cannot maximize the value in your business without a small team of trusted advisors. Trusted being the key word here, your team should start with a qualified bookkeeper and a good accountant both of whom abide by a Code of Professional Ethics ensuring complete confidentiality.

You think they’re expensive.

Actually, a qualified bookkeeper worth their salt will be able to offer you a package deal this how Bean Counters does things, a simple scale of fees based on the number of transactions so you don’t get any nasty surprises when you received the bill. In fact, in many cases as an experienced qualified bookkeeper I will be able to identify efficiency savings in other areas of your business, which, in some cases, could equate to more than the fees. A second pair of eyes looking out for your best interests, someone to bounce ideas off, books up to date, no pawing over paperwork at the weekend when you should be relaxing and recharging your batteries. Not as expensive as you think!

You don’t know how to find a good one.

This can be problem especially because anybody can call themselves a bookkeeper. This is so true, and it is very important that you do some background checks before taking on a bookkeeper. At can often not become apparent that there is something wrong until the accountant starts to do the year end accounts and by then there could be a big bill to put things right. So how do you find a good one? There are several professional bodies offering accreditation to bookkeepers, these professional bodies also ensure that their members follow strict guidelines, have the appropriate insurances and complete ongoing training to ensure they are offering up to date advice, especially important where tax matters are concerned as these rules are changing all the time.

Why DIY bookkeeping and accounting could hurt your business

have been noticing a common trap that some business owners are falling into. Some accounting and bookkeeping software advertise themselves as providing the complete package for business owners – allowing them to manage their books and handle their accounts on their own.

Why DIY Bookkeeping and Accounting Solutions may not be such a great idea.

While a DIY solution may sound like a good opportunity to relieve bookkeeping and accounting costs on the business, we are finding it to have the opposite effect on business owners come year end. Why?

One prime example is a lack of guidance throughout the year. When you are working with a bookkeeper or accountant, a simple mistake on your end can be quickly corrected to avoid serious damage. However, if you are flying solo, a small mistake at the beginning of the year that is repeated and not identified early can leave you in a mess.

So what do I do?

have a simple solution that will work for you and make the year-end work quicker and more cost-effective. We work with business owners like you on a quarterly and monthly basis doing a health check on the software you are using, guiding you in processing your books or providing the training that you need to run your books effectively and worry-free!

GST mistakes are the most common type of mistake we find business owners making. Click the link below to learn more about how to avoid the most common GST mistakes people make.

Recommended Apps for Accountants & Bookkeepers

It’s amazing to think that just six years ago this page would have been unnecessary. Back then, most of us were working in desktop accounting software. I would have had no apps to recommend!

Since then, an incredible thing has happened. An “ecosystem” of hundreds of cloud accounting apps has sprung up, and more and more keep being added every year.

I often get asked by other accountants and bookkeepers for recommendations, so I started keeping this list. I hope you find it useful!

Most of these apps I’ve used personally. A few of these apps I’ve tested enough to be able to recommend, but haven’t yet deployed “in the field”. Either way, I’m confident that they’ll serve you well as an accountant, bookkeeper, or small business owner.

I’ll keep adding to this list. There are lots of apps out there, so I could use your help! If you have a recommendation,