Discussing New Bookkeeper

15 Important Signs That You Need a New Bookkeeper

A robust business requires healthy finances. To have an accurate idea of how your business is doing and how to move forward, you need the correct data—the kind of data a good bookkeeper can provide.

Your bookkeeper takes care of income and expenses and categorizes them properly. They also prepare your books before tax season so all accounts are handed to the accountant who will file them.

Throughout the year, your bookkeeper guides you about your expenses and income and gives you a picture of your cash flow and how your business is doing. A good bookkeeper is a person who is proactive and takes measures to help your business grow and make profits. In addition, having a trustworthy bookkeeper gives you the time to focus on your business.

Several warning signs can tell you whether your existing bookkeeper is up to the job. Here is our list of the top 15.

1. Your Bookkeeper Is Behind on Books

The most fundamental task your bookkeeper should carry is to keep your books up-to-date. Income, expenses, bills, and invoices should be appropriately tagged and coded. At any time, you should be able to track your financial situation and get a clear idea of how your business is faring.

If your bookkeeper takes too long to do your books, invoices and bills will keep piling up and you won’t have the correct information about your business. You might be having cash flow problems and unaware of them because your books are behind. How can you make informed decisions if your data is obsolete?

2. Your Bookkeeper Asks You to Do Some Bookkeeping Tasks

Business owners commonly make bookkeeping mistakes and pay their bookkeeper to carry out the bookkeeping. You shouldn’t be asked to do their job. You are responsible for running your business, contacting clients and customers, and expanding your clientele. Keeping track of financial records is not something you should have to do.

Is your bookkeeper trying to pass on their work to you? If yes, then you may need a new bookkeeper.

3. Your Bookkeeper Doesn’t Ask Questions About Your Business

Every business is different because every business owner runs their business differently. Your bookkeeper should take a keen interest in what your company does and how you run it. They should be asking probing questions to help you.

For example, your bookkeeper should ask questions such as, “How do you inform a client they are late on a payment?” or, “How many people are on the payroll?” and, “Do you plan on hiring extra staff in the coming year?” Such questions will help them better understand who you are and how your business functions.

Bookkeepers who are just transactional and need to see the potential of each business are less likely to help your business grow.

4. Your Bookkeeper Is Not Looking Ahead

Several strategies can help a business save money. You want someone who sees how your financial affairs are unfolding and can make informed guesses as to where your business is headed.

Your bookkeeper should tell you how your finances look and how an extra employee could impact your expenses. They will also let you know about taxation trends and how you can benefit from new legislation, such as President Biden’s tax plan.

You want your bookkeeper to have your interests at heart and look ahead at what is coming and what opportunities exist for your business. If your bookkeeper is following developments and trends rather than staying ahead, you may need to look for a new one.

5. You Can’t Reach Your Bookkeeper

When you hire a bookkeeper, you will decide the best way to communicate together. Some prefer a message, others feel more comfortable with emails, and some choose phones.

Whatever method of communication you agree on, you should be able to reach your bookkeeper easily. If they pass you on to their PA or you can’t get hold of them for days, you have a communication problem.

It is expected to take a few minutes or hours to answer an email or phone call, but if the delay reaches days and weeks, you need to find a bookkeeper who will be there for you.

6. Your Bookkeeper Keeps Missing Deadlines

The tax year is filled with strict deadlines you need to follow. For example, you must fill in forms by a particular date, and your quarterly estimated taxes must be paid within a certain deadline. These deadlines shouldn’t be missed because you risk paying fines or paying more in taxes—not to mention you invite a time-consuming business audit.

Your bookkeeper should be aware of deadlines and file all necessary paperwork within the given period. If your business misses deadlines and has to pay fines, your bookkeeper needs to do something better.

7. Your Bookkeeper Doesn’t Mention Rebates, Benefits, Tax Deductions

Businesses need to follow smart strategies to save money. Companies can take advantage of several benefits, rebates, and tax deductions that can lower the tax you are asked to pay.

A good bookkeeper will keep track of all the deductions your business is entitled to and use them to lower your tax bill. Mileage, travel expenses, business insurance, and bank fees are some tax deductions you can utilize.

Your bookkeeper should tell you well in advance about any tax-reducing expenses you are entitled to so that you can keep track of them and gather all bills, expenses, and payments.

There is no point in paying extra taxes when you can benefit from rebates and deductions. If your bookkeeper reminds you of your benefits a day before tax season, you should look for a new one.

8. You Can’t Make Data-Driven Decisions About Your Business

A bookkeeper keeps track of all your business’s income and expenses. Bookkeepers are responsible for providing accounts and records of how your business is doing, how much it pays in payroll, and how much income it earns.

You need good data to make informed decisions. Your bookkeeper should provide you with that. How much money is your business making? What is your profit? How long does it take for customers to pay bills? How has your profit rate improved or worsened over the years?

Once you have all the data, you can decide how to move forward and where your business should be headed. If your bookkeeper can’t provide up-to-date records, you can’t help your business grow.

9. Your Bookkeeper Makes Mistakes but Won’t Take Responsibility for Them

We all make mistakes, but we must take responsibility for them. Even the best bookkeeper can make mistakes. The right way is to acknowledge them and fix them.

Some bookkeepers try to pass on the responsibility to the business owner. However, you are not responsible for any mistakes your bookkeeper makes, just as they are not responsible if your client is unsatisfied with your services.

If your bookkeeper fails to own up to their mistakes, you should look for a replacement.

10. Your Bookkeeper Doesn’t Do Bank Reconciliation

Your business bank statement and your business records should match. This so-called bank reconciliation is the best way to keep track of all your financial transactions. Any transaction that looks out of the ordinary will immediately pop up. Also, a payment that didn’t come through will show up.

Your bookkeeper should do a bank reconciliation at least once a month. Without bank reconciliation, you might miss out on a payment or have a distorted view of your business finances.

11. You Don’t Have Access to Your Accounting Data

As a business owner, you can access your accounting data. Most bookkeepers store all their clients’ accounting data on the cloud, making it easy for them to give you access.

Your bookkeeper shouldn’t find excuses to prevent you from accessing your accounting data. If your bookkeeper is giving you odd justifications for lack of access, something may be wrong. They are either hiding something, or they haven’t updated your data. Either way, you may need to change your bookkeeper. 

12. Tax Season Is a Nightmare for Your Bookkeeper

Tax season shouldn’t be a nightmare for your bookkeeper. If your financial and accounting records are straight and organized, it is easy for an accountant to file your taxes.

If your bookkeeper is flooded with work and dreads tax season, it might be because they haven’t done all the preliminary work throughout the year. You want someone who feels confident and composed to handle your bookkeeping needs.

13. Your Bookkeeper Inputs Incorrect Accounting Codes

Accounting codes classify records. Each transaction is categorized according to such an accounting code. When you input a record under the wrong accounting code, you create unwelcome discrepancies and inconsistencies in your record-keeping.

Bookkeepers should know which transaction goes under which accounting code. The final record is wrong if your bookkeeper mixes up accounting codes and transactions. You might pay too little or too much tax, and all your documents must be reviewed.

A good bookkeeper knows about accounting codes and how transactions are categorized. Otherwise, they could do a better job.

14. You Have Regular Cash Flow Problems

Cash flow management is of paramount importance for a business. Do you have cash flow problems at the end of the month? Do you find it hard to pay contractors because you thought your business had money but then found out it didn’t?

For example, cash flow problems may occur because some of your clients are taking longer to pay your invoices. Your bookkeeper should inform you so you can contact these clients and remind them of your outstanding invoices. After all, you must be paid for the goods and services you provide to be on time for your payments.

Recurring cash flow problems suggest a bookkeeper who keeps poor track of how your business is performing.

15. You Have Increased Sales but Stagnant Profits 

A successful business increases both its sales and profits. Sometimes, however, companies increase their sales but see no difference in their earnings. This problem points to increased expenses.

Your bookkeeper should follow closely how your business is doing. By regularly checking your transactions and issuing invoices, they should be able to know if you have increased sales but stagnant profits. A good bookkeeper will also highlight the areas where your business is lagging—for instance, too high payroll or increased fixed expenses. You can then see how to minimize your costs and maximize your profits.

Your bookkeeper should be proactive, show interest, and develop ideas that make your business more profitable.

You Want Your Bookkeeper to Be Your Helpful Partner

A good bookkeeper helps your business run its financial affairs smoothly. They are proactive and responsible and have your business’s well-being at heart.

Don’t settle for an average bookkeeper. With our outsourced bookkeeping services company, you get a team of bookkeeping professionals, including a CPA and CFO level staff with over 25 years of experience—as well as fully trained and certified Intuit QuickBooks Pro Advisor bookkeepers.Start your free trial now, or contact Remote Quality Bookkeeping by calling 866-567-4258 and talking to a nationally certified bookkeeping specialist. Our bookkeeping solutions for your business are cost-effective and give you the peace of mind and confidence you need to grow your company.

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