12 Questions to Ask Before You Hire a Bookkeeper

Business is booming and you’re finally starting to feel at home as a business owner, but as things get busier, it gets harder for you to manage your company finances. 

You’ve heard of bookkeepers before, and you know many businesses around you have one, but is it finally time for you to hire a bookkeeper?

If you’re looking to hire a bookkeeper, how can you make sure that they are right for you and your business? Finding the right bookkeeper can be challenging – especially if it is your first time hiring – but with the right information and mindset, it can be a piece of cake.

To make things convenient for you, POP Business has compiled a complete list of 12 commonly asked questions (with answers!) when it comes to hiring a bookkeeper.

We also provide online bookkeeping services should you need help with your bookkeeping!

A bookkeeper is responsible for recording a business’ financial transactions, including post debits (costs) and credits (income). 

Unlike an accountant, a bookkeeper focuses solely on documenting your business’ financial transactions but does not offer financial advice, nor interpret the data produced. Before recklessly hiring a bookkeeper, business owners need to be crystal clear on who bookkeepers are, what they do, and how they may help their business grow. 

It can be difficult to know when you should take the next step for your business and hire a bookkeeper. However, there are usually a few tell tale signs that may indicate that it is time for you to invest in one. 

Consider hiring a bookkeeper when:

• the time you spend recording your finances is taking away from working on the core of your business,
• it is getting hard to keep up to date with your business’ financial transactions, and/or
• your compliance duties (ie. taxes) are getting complicated.

Before working with a bookkeeper, make sure they are legally qualified for the job. The qualification requirements for a bookkeeper varies from country to country. In Australia, bookkeepers that offer BAS management services for a fee must first be registered with the Tax Practitioners Board.

Bookkeepers also need to have completed a Certificate IV level qualification (from an educational institution such as TAFE) – most commonly a Certificate IV Accounting and Bookkeeping or a Diploma in Accounting.

Before hiring a bookkeeper, it is important to understand the differences between an independent bookkeeper and a bookkeeping firm. This will help you determine which of the two options is better suited for your business.

Below are the factors to consider when hiring a bookkeeper:

• Work environment: an independent bookkeeper will be more flexible to visit your workplace and communicate with you in person, whereas a bookkeeper from a firm has duties to their organisation
• Range of experience: an independent bookkeeper may not have the experience necessary to handle your business’ unique circumstances, whereas an established bookkeeping firm will most likely have services and solutions to all situations possible.
• Schedules and deadlines: you may need to be more lenient with deadlines for independent bookkeepers, than a team from a bookkeeping firm.
• Online bookkeepers: POP offers online bookkeeping services. You can complete your bookkeeping online in a fast and efficient manner whilst enjoying the benefits of cloud accounting.

Bookkeepers can have different areas of expertise and therefore different strengths and weaknesses. It is important to clarify before hiring a bookkeeper their style of work and whether that is compatible with your business.

For example, some bookkeepers may be more detail-oriented, while others are more strategic. Differing levels of experience may also differentiate between a good bookkeeper and a great one – for instance, a great bookkeeper will know to review their own work to correct any errors.

An added benefit of using bookkeeping services which are offered by an accounting firm is to ensure you are getting expert accountants to review the work. This will minimise errors and ensure the strategy is being looked over at the same time.

Bookkeepers have a wide range of duties and responsibilities that they may fulfil.

Many business owners may rush to determine what a bookkeeper’s first task is, but in reality, there is a whole scope of bookkeeping tasks to be aware of when you hire a bookkeeper. 

Understanding exactly which ones your business needs and who can provide them may help you save costs on any unnecessary services.

Below is a list of common bookkeeping tasks:

• Lodging and filing sales tax, providing GST advice, FBT, etc;
• Calculating GST (try our free online GST calculator);
• Restoring bank transactions;
• Raising sales invoices and following up with debtors;
• Sorting supplier bills and paying your suppliers;
• Preparing balance sheet reports (outlining your profits and losses)
• Preparing a budget to monitor past and future performance against;
• Specialised accounting services such as interpreting reports and predicting your business’ future cash-flows.

Keeping in mind the average cost for a bookkeeper will help you evaluate whether or not hiring one is a worthy investment. Bookkeeping costs depend largely on the primary service offered – data entry or accounting application.

A straightforward data entry bookkeeping service typically costs less than one which involves accounting tasks. There may also be differences in costs depending on whether your bookkeeper is working independently and remotely, or working at a bookkeeper firm.

In Australia, the average project-based cost of a standard bookkeeping service is approximately $90, and hourly wages can range from $50 to $120 per hour depending on the complexity of the project. 

Now that you’ve decided whether or not hiring a bookkeeper is the right call, here are five sample interview questions to help you sift out which bookkeeper is the right one for you.

1. “What previous professional bookkeeping experiences do you have?” – this is an important question to ask depending on how complex your financial transactions are and whether extensive experience is necessary.

2. “What bookkeeping systems and accounting programs are you familiar with?” – a single-entry bookkeeping system is commonly used in small businesses to informally keep track of cash receipts whereas a double-entry system is more complex and involves debits and credits. Familiarity with commonly-used programs such as XERO and MYOB is also valuable.

3. “How will your services help our business?” – a more general question you can ask to gauge the interviewee’s level of commitment to the position and understanding of their work.

4. “What are your experiences interacting with clients?” – in the case that you are outsourcing a bookkeeper, communication on your part is key. As some bookkeepers may also be working with other clients simultaneously, make sure they have demonstrated good time management skills from previous work experiences.

5. “What are your experiences working as part of a team?” – not only will a bookkeeper be communicating with you, their work may also be integral to your existing team members’. As a result, it’s important that a bookkeeper knows how to work and contribute in team settings.

As more and more bookkeepers turn to working remotely and prefer digital means of communication, it is integral for business owners to know how to establish a strong communications channel.

Using business-focused messaging platforms such as Slack and digital organisation tools such as Trello will keep both parties accountable for their tasks and duties and reinforce previously agreed upon deadlines. 

In addition to using digital communication platforms, it is also important to consider your bookkeeper’s overall communication tendencies.

Are they clear and concise when speaking with you? Are they thorough when communicating tasks or short and curt? Do they prefer communicating via phone or email, and if by phone, do they have phone support? These are all vital questions to ask when deciding to hire and work long term with a bookkeeper.

Be sure to communicate with your bookkeeper about your deadline and scheduling expectations. Freelance bookkeepers who are used to working independently may not be acquainted with your business’ schedules and expected response times so it is important to clarify and decide upon deadlines before you start on projects.

Ask about what you can expect each week or each month from them and how long it usually takes for them to reply to your questions and enquiries. 

Something that is often overlooked by business owners but still largely important is the ownership of software subscriptions such as XERO and MYOB.

Xero allows for subscriptions to be held on your behalf by your bookkeeper/accountant. 

This unlocks discounts like POP’s 20% lifetime Xero subscription discount.

To help you further prepare when hiring a bookkeeper, let’s look at things from a bookkeeper’s point of view. As the job market is extremely dense right now, it would be helpful for applicants to specify whether your open position is an entry-level bookkeeping position. 

As part of the job-hunting process, bookkeepers may also want to ask business owners questions to clarify on the position, such as:

• “How many accounts do you have?” – commonly asked by bookkeepers to help them gauge the workload
• “How often do you report your taxes?” – bookkeepers will have to report your taxes for you on a monthly, quarterly or yearly basis
• “How is your debt-to-equity situation?” – some bookkeepers also specialise in managing debt and may help you assess your situation as well

Looking to hire a bookkeeper but have no idea where to start? Why not try out our bookkeeping services here at POP Business? Our bookkeeping services are open to both small businesses and large ones and are available all over Australia, including Sydney!

At POP, we provide you with quick, affordable and professional bookkeeping services, leaving you time to get on with your business!