Working with a good bookkeeper can mean the difference between boosting the growth of your business and allowing it to go haywire, just like an uncontrolled car crashes with the side lane.
It doesn’t matter whether your bookkeeper is an accountant who has been working with your company from a very long time or it is your family member, you need to make sure that the job is being done properly. A careless approach towards bookkeeping can prove to be disastrous for your business and that’s why it is paramount for any business to have good bookkeepers.
For a business owner, it is very difficult to say that whether the bookkeeper is maintaining the books properly or not. Most of the small and medium-sized business owners have always more on their plate and that’s why it become very difficult for them to take on an extra task of keeping an eye on bookkeeping as well. In addition to this, most of the bookkeepers are also not good at accounting and that’s the reason why they hire expert bookkeepers.
So, to help you with your bookkeeping practices, we have compiled a list of top warning signs to look for in a bad bookkeeper.
One of the first characteristic of a bad bookkeeper is late response. Nothing can be more bugbear than leaving a note to your bookkeeper and then getting the response after a week. Such an approach towards bookkeeping hangs your business operations in the ‘to do list’ and you are not able to harness the advantages of good bookkeeping system. Quick response is a part of general professionalism and you should expect this to be practiced by your bookkeeper without any guidance. If your bookkeeper is taking weeks to response to your emails then there are maximum chances that they are hiding something or they are not taking their job seriously. In such cases, you should set an expectation for the response time and give clear warnings regarding it.
Lots of old transactions in the QB undeposited fund
If you are a QuickBooks use then you must be aware about the undeposited fund feature which is very common for most of the QB user. If you open undeposited fund in QuickBooks and see a lot of transaction then it mean that either your business is booming or your bookkeeper is clueless. But in most of the cases, the second reasons is more relevant as your bookkeeper may not be handling invoicing, payment or record deposit, correctly in QuickBooks. You should know that if the accounts receivable is not handles properly then it can result in overstated income and even inaccurate financial details. If you are witnessing a lot of undeposited funds in QuickBooks then it can be warning sign of working with a incompetent bookkeeper.
Not able to understand basic bookkeeping terminology
You will be surprised to know that there are businesses that have been working with bookkeepers that don’t even know what reconciliation is and that is simply outrageous. A good bookkeeper should at least know basic bookkeeping terminology like cash and accrual based accounting, accounts payable, accounts receivable, assets, liabilities and much more. You should always speak to your bookkeeper in the terms that you want them to use otherwise, your bookkeeper will keep taking advantage of your ignorance and you will never be able to work at your peak efficiency because of the incompetency of your bookkeeper. If your bookkeeper is not able to understand even the basic terminology then you should consider replacing them as soon as possible.
Minimal or no reporting
When it comes to company books then errorless, timely and insightful reporting becomes essential and without it, all your efforts will go astray. You should know that reporting is as important as reconciliation and categorizing transactions. If you are working with a good bookkeeper then he will run regular reports and responds immediately to new report request. If you are not receiving your business balance sheet, income statement and cash flow statement on time then there must be something wrong with the seriousness of your bookkeeper towards his job. Reports give you an in-depth knowledge of your company’s financial status and that’s why you should never take them lightly.
Working with a competent bookkeeper is very necessary if you want a seamless accounting operation. Compromising with the skill set of your bookkeeper is like compromising with the growth of your company.